Table 2
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Model parameters.

ParameterValue
Discount factor|$\beta$|0.96
Risk aversion|$\sigma$|1.00
Average income|$y$|0.79
Low household wealth|$b_0^L$|0.00
Average government consumption|$\mu_g$|0.18
Autocorrel. G|$\rho_g$|0.88
Std. dev. error|$\sigma_e$|0.017
Initial government debt|$B_0$|0.35
Output cost default|$\varphi_0$|0.004
ParameterValue
Discount factor|$\beta$|0.96
Risk aversion|$\sigma$|1.00
Average income|$y$|0.79
Low household wealth|$b_0^L$|0.00
Average government consumption|$\mu_g$|0.18
Autocorrel. G|$\rho_g$|0.88
Std. dev. error|$\sigma_e$|0.017
Initial government debt|$B_0$|0.35
Output cost default|$\varphi_0$|0.004
 

Notes: Government expenditures, income, and debt values are derived using data from France, Germany, Greece, Ireland, Italy, Spain, and Portugal.

Table 2
Open in new tab

Model parameters.

ParameterValue
Discount factor|$\beta$|0.96
Risk aversion|$\sigma$|1.00
Average income|$y$|0.79
Low household wealth|$b_0^L$|0.00
Average government consumption|$\mu_g$|0.18
Autocorrel. G|$\rho_g$|0.88
Std. dev. error|$\sigma_e$|0.017
Initial government debt|$B_0$|0.35
Output cost default|$\varphi_0$|0.004
ParameterValue
Discount factor|$\beta$|0.96
Risk aversion|$\sigma$|1.00
Average income|$y$|0.79
Low household wealth|$b_0^L$|0.00
Average government consumption|$\mu_g$|0.18
Autocorrel. G|$\rho_g$|0.88
Std. dev. error|$\sigma_e$|0.017
Initial government debt|$B_0$|0.35
Output cost default|$\varphi_0$|0.004
 

Notes: Government expenditures, income, and debt values are derived using data from France, Germany, Greece, Ireland, Italy, Spain, and Portugal.

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