This paper updates and extends the work of Barro (2000). International data confirm the presence of the Kuznets curve-an inverse-U shape relationship between income inequality and per capita GDP-that is relatively stable from the 1960s into the 2000s. The direct effect of international openness...

We derive an option-pricing formula from recursive preference and estimate rare disaster probability. The new options-pricing formula applies to far-out-of-the money put options on the stock market when disaster risk dominates, the size distribution of disasters follows a power law, and the...