A General Equilibrium Model of Sovereign Default and Business Cycles
---- Acknowledgments ----
Earlier versions of this paper circulated under the title "A Solution to the Disconnect between Country Risk and Business Cycles Theories." We thank Cristina Arellano, Mark Aguiar, Andy Atkeson, Fernando Broner, Jonathan Eaton, Gita Gopinath, 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, Mark Wright, and Jing Zhang for helpful comments and suggestions. We also acknowledge valuable comments by participants at various seminars and conferences since 2007. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.