This paper presents a theoretical study of the effects of globalization on risk sharing and welfare. We model … globalization as a gradual and exogenous increase in the fraction of goods that are tradable. In the absence of frictions …, globalization opens new goods markets and raises welfare. We assume, however, that countries cannot commit to pay their debts …

equity changes as globalization takes place. This is because the launch of the single currency has led to the elimination of … among EU investors. We focus not only on the impact of globalization on the level of the cost of equity, but also on the …

This paper analyses theoretically and empirically the relationship between trade and war. We show that the intuition … that trade promotes peace is only partially true even in a model where trade is beneficial to all, war reduces trade and … leaders take into account the costs of war. When war can occur because of the presence of asymmetric information, the …