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Sovereign Risk : A Macro-Financial Perspective


  • Udaibir S. Das

    (Asian Development Bank Institute (ADBI))

  • Maria A. Oliva
  • Takahiro Tsuda


We 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 before those risks feed into the real economy.

Suggested Citation

  • Udaibir S. Das & Maria A. Oliva & Takahiro Tsuda, 2012. "Sovereign Risk : A Macro-Financial Perspective," Governance Working Papers 23344, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:govern:23344

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    References listed on IDEAS

    1. Anders Aslund & Valdis Dombrovskis, 2011. "How Latvia Came through the Financial Crisis," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6024.
    2. C. Randall Henning, 2002. "East Asian Financial Cooperation," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa68, October.
    3. C. Randall Henning, 2011. "Coordinating Regional and Multilateral Financial Institutions," Working Paper Series WP11-9, Peterson Institute for International Economics.
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    More about this item


    sovereign risk; macro-financial dimensions; default risk;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects


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