A Solution to the Disconnect between Country Risk and Business Cycle Theories
---- Acknowledgements -----
We thank Cristina Arellano, Andy Atkeson, Fernando Broner, Jonathan Eaton, Jonathan Heathcote, Olivier Jeanne, Pat Kehoe, Tim Kehoe, Narayana Kocherlakota, Guido Lorenzoni, Andy Neumeyer, Fabrizio Perri, Victor Rios-Rull, Tom Sargent, Stephanie Schmitt-Grohe, Martin Uribe, and Mark Wright for helpful comments and suggestions. We also acknowledge comments by participants at seminars and conferences at Paris School of Economics, NYU, CUNY, the Federal Reserve Banks of Kansas City and Minneapolis, SUNY-Albany, Duke University, Univ. of Texas-Austin, Ohio State University, 2007 SED Annual Meeting, 2007 LACEA Annual Meeting, the CREI-CEPR 2007 Conference on Sovereign Risk, the X Workshop in International Economics and Finance at Di Tella University, the 2008 IEA World Congress and the 2008 NBER Summer Institute. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.