It was published in 1995 by Robert A. Jarrow and Stuart Turnbull.
[1] Under the model, which returns the corporate's probability of default, bankruptcy is modeled as a statistical process.
The model extends the reduced-form model of Merton (1976) [2] to a random interest rates framework.
Reduced-form models focus on modeling the probability of default as a statistical process, whereas structural-models inhere a microeconomic model of the firm's capital structure, deriving the (single-period) probability of default from the random variation in the (unobservable) value of the firm's assets.
[3] Large financial institutions employ default models of both the structural and reduced-form types.