The paper describes the theoretical foundations of Markov decision processes (MDP), presents the pricing algorithms for European and American call and put options using the MDP. Results were compared with results obtained using the Black-Scholes model.

This paper summarizes the results of empirical studies on the effects of sovereign debt, deficit and default on the economy. The obtained results shows that excessive debt and deficit are very harmful for economic growth, as opposed to default, which tend to heal the economy and usually is the...