RICHMOND, Virginia, Oct. 29 (TNSLrpt) -- The Federal Reserve Bank of Richmond issued the following white paper (No. 25-09) in October 2025 by Grey Gordon and pablo Guerron-Quintana entitled "Sovereign Default Intensity and Noise Bargaining."

Here are excerpts:

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Hard sovereign defaults--defaults with large haircuts--are associated with deeper recessions, longer durations, and, as we show, larger devaluations than soft defaults. We rationalize . . .

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