We analyze the effects of financial and trade globalization on the likelihood of financial crashes in emerging markets. While trade globalization always makes crashes less likely, financial globalization may make them more likely, especially when trade costs are high. Pessimistic expectations...

We propose a simple quantitative method to linearize around the risky steady state of a small open economy. Unlike when the deterministic steady state is used, the net foreign asset position is well defined. We allow for stochastic income and stochastic interest rate.

Home bias is a perennial feature of international capital markets. We review various explanations of this puzzling phenomenon highlighting recent developments in macroeconomic modelling that incorporate international portfolio choices in standard two-country general equilibrium models. We refer...

This paper explains three key stylized facts observed in industrialized countries: 1) portfolio holdings are biased towards local equity; 2) international portfolios are long in foreign currency assets and short in domestic currency; 3) the depreciation of a country's exchange rate is associated...

We provide a first comprehensive account of the dynamics of Eurozone countries from the creation of the Euro to the Great recession. We model each country as an open economy within a monetary union and analyze the dynamics of private leverage, fiscal policy and spreads. Our parsimonious model...

Dans un contexte de renchérissement prévisible de l’énergie au cours des vingt prochaines années, orienter l’effort d’innovation industrielle et l’offre de biens et services vers des technologies économes en énergie est une nécessité. Toutefois, une hausse des prix de...

L’article montre qu’une politique d’amélioration des infrastructures d’une région pauvre permet de réduire l’inégalité spatiale mais peut aboutir à une géographie moins efficace et un taux de croissance plus faible. Les effets inverses sont obtenus pour une politique qui...