This paper investigates the choice that market makers take when deciding what assets to trade in the face of the diversity in the risk profile of investors. Specifically, financial assets are dichotomized into relatively high risk and relatively low risk assets. Consequently, a model of vertical...

Developing country governments are often forced to issue debt in a foreign currency or commit the "original sin". The "original sin", regardless of exchange rate regime, exacerbates debt problems for these countries. Consequently, this paper investigates the relationship between US dollar...