Essays in International Macroeconomics

This dissertation contains three essays in International Macroeconomics. The first two chapters study clustered sovereign defaults, the default events where multiple countries default in a relatively short period of time. In spite of the fact that clustering of defaults is a recurring phenomenon, there is a lack of empirical as well as quantitative research focusing on clustered defaults. Therefore, the first two chapters try to uncover the the nature of shocks and the mechanism through which these shocks lead countries to clustered defaults. The first chapter uses the data on 146 sovereign defaults from 1975 to 2014 and categorizes one-third of these defaults as clustered default episodes. It then asks if the nature of shocks that drive clustered defaults differ from those that drive idiosyncratic defaults. I find that global variables, global shocks to transitory component of output of the countries and world interest rate fluctuations, play a crucial role in predicting clustered default events: for clustered default episodes, the predicted probability of default goes up by two-and-a-half times after the inclusion of global variables as explanatory variable. Idiosyncratic default