Sovereign Risk: A Macro-Financial Perspective
AbstractWe examine some of the macro-financial dimensions of sovereign risk and propose a conceptual framework that captures risks other than just the default risk. Morphed under a multi-dimensional notion of sovereign risk, we argue that the existing empirical methodologies to measure sovereign risk cover only partial aspects of sovereign risk and fail to capture its macro-financial dimensions. We highlight a menu of tools that could be used to tackle the broader notion of sovereign risk, and suggest that authorities should actively use them to manage the macro financial dimensions of sovereign risk and before those risks feed into the real economy.
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Bibliographic InfoPaper provided by Asian Development Bank Institute in its series ADBI Working Papers with number 383.
Length: 31 pages
Date of creation: 02 Oct 2012
Date of revision:
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More information through EDIRC
sovereign risk; default risk; macro-financial dimensions;
Find related papers by JEL classification:
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
- F30 - International Economics - - International Finance - - - General
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-CBA-2012-10-13 (Central Banking)
- NEP-MAC-2012-10-13 (Macroeconomics)
- NEP-RMG-2012-10-13 (Risk Management)
- NEP-SEA-2012-10-13 (South East Asia)
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