题目：A Tale of Two Countries: Sovereign Default, Trade, and Terms of Trade
主讲人： Weishi Gu (Grace)
assistant professor at Economics department of UC Santa Cruz..
Primary Research Fields:Macroeconomics,International Economics; Secondary Research Fields:Labor Economics, Computational Economics.
时间: 6月23日（周二）下午2:00-3:30
地点：经济学院大楼305会议室
主持人：陈仪老师
论文摘要：
This paper explores the connections between sovereign debt default risk, income, and trade through a terms-of-trade channel, in a DSGE model of two production economies with risk-averse agents. It makes two main contributions. First, the paper models the impact of sovereign defaults on trade, a feature largely absent in the theoretical literature on sovereign default. The model endogenously generates bilateral trade flow declines when a country defaults on its sovereign debt. Second, this paper endogenizes the terms of trade and the real exchange rate, which interact with default risk. It captures a defaulting country`s terms-of-trade deterioration, which contributes to its income and trade losses. In a quantitative analysis, the model produces countercyclical trade balances, procyclical bilateral trade, countercyclical bond spreads with a data-consistent average, and other empirical features of business cycles in Mexico and its sovereign default episodes. The model results imply that greater vertical integration and effective policies to maintain healthy foreign business environment can reduce default-triggered welfare losses to both the creditor country and the borrower country.
