BACKGROUND The Médecins Sans Frontières project of Uzbekistan has provided multidrug-resistant tuberculosis treatment in the Karakalpakstan region since 2003. Rates of default from treatment have been high, despite psychosocial support, increasing particularly since programme scale-up in 2007. We aimed to determine factors associated with default in multi- and extensively drug-resistant tubercu...

Our paper provides a complete characterization of leverage and default in binomial economies with financial assets serving as collateral. First, our Binomial No-Default Theorem states that any equilibrium is equivalent (in real allocations and prices) to another equilibrium in which there is no default. Thus actual default is irrelevant, though the potential for default drives the equilibrium a...

Reiter’s original proposal for default logic is unsatisfactory for open default theories because of Skolemization and grounding. In this paper, we reconsider this long-standing problem and propose a new world view semantics for firstorder default logic. Roughly speaking, a world view of a firstorder default theory is a maximal collection of structures satisfying the default theory where the def...

ON THE RELATIONSHIP BETWEEN QUANTIFIED REFLECTIVE LOGIC AND QUANTIFIED DEFAULT LOGIC Frank M. Brown Abstract: Reflective Logic and Default Logic are both generalized so as to allow universally quantified variables to cross modal scopes whereby the Barcan formula and its converse hold. This is done by representing both the fixed-point equation for Reflective Logic and the fixed-point equation fo...

We model dynamic credit portfolio dependence by using default contagion in an intensity-based framework. Two different portfolios (with 10 obligors), one in the European auto sector, the other in the European financial sector, are calibrated against their market CDS spreads and the corresponding CDS-correlations. After the calibration, which are perfect for the banking portfolio, and good for t...

Modeling correlated default risk is a new phenomenon currently sweeping through the credit markets. Little is known about the drivers of default risk at the portfolio level. This paper develops a methodology to assess alternative specifications of the joint distribution of default risk. Specifications are based on three criteria: level, asymmetry, and tail-dependence in the joint default distri...

This paper estimates the degree of variation over time in the price for bearing exposure to U.S. corporate default risk during 2000-2004, based on the relationship between default probabilities, as estimated by Moody’s KMV EDFs, and default swap (CDS) market rates. The default-swap data, obtained through CIBC from 39 banks and specialty dealers, allow us to establish a strong link between actua...

The default risk of firms is driven by firm-specific factors but also by systematic factors and the latter are responsible for default dependence between different firms. Another source of default dependence is structural links between firms. For example, a mother company may consist of different legal entities and a default of the former may be contagious and lead to the default of all others,...

In this paper, we study the relationship between default probability and stock returns. Using the market-based measure of Expected Default Frequency— (EDF—) constructed by Moody’s KMV, we first demonstrate that higher default probabilities are not necessarily associated with higher expected stock returns, a finding that complements the existing empirical evidence. We then show that the puzzling...

While research into default reasoning is extensive and many default intuitions are commonly held, no one system has yet captured all these intuitions nor given a formal account to motivate them. This paper argues that the extended maximum entropy approach which incorporates variable strength defaults provides a benchmark for default reasoning that is not only objectively motivated but also sati...