Sovereign Risc and Out-of-Equilibrium Exchange Rate Dynamics, by Dionísio Dias Carneiro and Thomas Wu, published by IEPECDG (TD nº 10, Nov./06). “We show that sovereign risk premium contains important information about the short run exchange rate dynamics in emerging economies and that net foreign assets play the role in the link between… the accumulation of foreign assets …. the exchange rate appreciation …” http://migre.me/114cv
