COUNTRY RISK AND CONTINGENCIES

Value-at-Risk for country risk ratings

Undescribable Contingencies *

We develop a model of complex undescribable contingencies. These are contingencies that are understood by economic agents — their consequences and probabilities are known — but are such that every description of such events necessarily leaves out relevant features that have a non-negligible impact on the parties’ expected utilities. Using a simple co-insurance problem as backdrop, we introduce ...

Framing Contingencies ∗

We introduce a model of decision making under uncertainty which incorporates framing effects for how contingencies are described. The primitive is a family of preferences, indexed by partitions of the state space. Each partition corresponds to a description of the state space. We axiomatically characterize the following partition-dependent expected utility representation. The decision maker has...

Risk-sharing Agreements: Country Experiences and Challenges

Country Risk Analysis: a Survey

In view of the rapid growth of international lending and foreign direct investments, the country risk analysis has become extremely important for the international creditors and investors. This paper traces the history of country risk analysis and briefly discusses the methods used by banks, agencies and researchers for evaluating country risk. Both qualitative and quantitative methods have evo...