often be inferred by random thinning techniques, see Giesecke, Goldberg and Ding (2007) for details. Within the top-down framework, Schönbucher (2006) creates a time-inhomogeneous Markov-chain of transition rates. Default correlation is introduced by changes in the volatility of transition rates. For certain parameter constellations, higher volatility means faster transition to lower states as default, and as a consequence implies higher default correlation, and vice versa. Similarly, Hurd and Kuznetsov (2006a) and (2006b) induce correlation by a random change in the speed of time. A faster speed of time means faster transition to a lower state, possibly default, and as a result increases default correlation, and vice versa. For a comparative analysis of correlation approaches in finance, see Albanese, Li, Lobachevskiy, and Meissner (2010). References Mathematical finance