While the literature of corporate credit risk is advancing at a rapid pace, the issue of sovereign credit risk is still in its early stages. Sovereign debt is different from corporate debt: If a sovereign does not repay the amount which is specified in the debt contract it is not possible to initiate proceedings in a bankruptcy court which allow the lenders to seize all assets of the borrower. This implies that there are greater incentives for a sovereign to strategically default, i.e., to pay less than the contractual amount even if there are enough resources to fulfill the debt contract.
To take account of these factors we will focus on the country’s willingness or incentives to fully honor its obligations rather than on its ability to do so. The model differs from classical corporate credit risk models: It is not the dropping of the company’s asset value under the outstanding face value which triggers default, but rather a decision of the country whether to continue in respecting its commitments or whether to default.
According to European treaties, the main objective of the Eurosystem is to maintain price stability through a two pillars strategy. In opposition to the Fed, the ECB has clarified that price stability is measured by inflation rates of below, but close to, 2% over the medium term. To get this target, the first pillar gives the main role to the money and the second pillar consists in an analysis based on a large set of economic and financial indicators. In this respect, it is well known that asset prices are variables of great interest in the conduct of the monetary policy and will certainly be more and more integrated in the future in the monetary policy makers decision process. As noted by Otmar Issing in his introductory statement at a ECB workshop in December 2003, ”a sufficient forward looking cenral bank ... wil naturally conduct a comprehensive analysis of all potential consequences of asset price boom and bust cycles”.
Especially, among all asset prices, the monitoring of housing prices is one of the element of regular assessments carried out by central banks. Indeed, housing finance has an impact on the transmission of monetary policy to the economy and a better understanding of the housing sector could lead to more accurate inflation forecasts. Recently, some researchers have put forward that central banks should rather target asset prices instead of inflation in their strategy. For example, Leamer (2007) proposes a monetary policy based on housing starts rather than output gap.
Arthritis is not only a disease of the elderly; it affects younger people as well. An estimated 4,600 Australian children in 2004–05 had arthritis. While remission is common, the disease can become chronic and result in complications over time. Juvenile arthritis also has adverse effects on children’s growth and musculoskeletal development.
Juvenile arthritis juvenile rheumatoid arthritis or juvenile chronic arthritis as it is sometimes referred to was declared a focus area under the Better Arthritis and Osteoporosis Care (BAOC) budget initiative of the Australian Government in 2006.
