Sandleris, Guido; Sapriza, Horacio; Taddei, Filippo - Collegio Carlo Alberto, Università degli Studi di Torino - 2008
In recent years, some countries have issued sovereign bonds indexed to real variables such as GDP. Moreover, there has been discussions about this issue during the European crisis. This paper analyzes the effects of introducing this type of contracts in a standard DSGE model with sovereign...