international equity transactions that accentuate the role of international risk sharing as a factor for the macroeconomic response … shock affecting only one country. Efficient global risk-sharing imply that expected productivity gains in one country will … for the productivity gains can further increase the risk exposure of foreign shareholders. The model is calibrated to show …

The U.S. could be the source of the global financial risk because it longs risky assets and shorts safe assets in the … international capital market. This paper builds a stylized two-country model to highlight that when the developed country's risk …-bearing capacity improves, it holds more foreign risky assets and issue more risk-free debt. The foreign country's risk …

gross (but not net) capital inflows in general increase the risk of a currency crisis, but looking at a disaggregated level …, gross portfolio flows increase the risk of a currency crisis for advanced economies, whereas gross FDI inflows decrease the … risk of a crisis for EMEs. Third, contagion has a very strong impact, consistent with the past literature, especially …