"We show that computing business cycles in emerging economy models using the discrete state space technique may be misleading. We solve the models of sovereign default presented by Aguiar and Gopinath (2006) using interpolation. We find that the simulated behavior of the spread is quite...

"We study an economy in which policymakers of different types (patient vs. impatient) alternate in power. Our framework builds on the model used in recent quantitative studies of sovereign default. We show that a default episode may be triggered by a change in the type in office, from a patient...