Table 1 Parameter values
Value | Source | ||
|---|---|---|---|
Country risk aversion | σ | 2.00 | Standard in the literature |
Discount factor | β | 0.81 | Arellano (2008), annual frequency |
Consumption weight | α | 0.83 | Argentinian data |
Re-entry probability | μ | 0.10 | Benjamin et al. (2009) |
Output loss in autarky | θ | 0.03 | Arellano (2008) |
Financial aid | δ | 0.00 | |
Investors risk aversion | λ | 5.00 | Lizarazo (2013) |
Risk-free interest rate | r | 0.04 | Standard in the literature |
Endowment process’s parameters | ρ y | 0.62 | Argentinian data |
σ y | 0.054 |