scale economies using two production models. The standard risk-neutral model finds little evidence of scale economies. The … model using more general risk preferences and endogenous risk-taking finds large scale economies. The authors show that …

efficient risk-sharing, negatively correlated with relative consumptions across countries. This paper shows that a model with … incomplete markets and a low price elasticity of imports can account for these properties of real exchange rates. The low price … international transmission of productivity shocks generate the observed degree of risk-sharing: one associated with an improvement …

We develop a model of banking industry dynamics to study the quantitative impact of capital requirements on bank risk …

their perceived risk. We develop a dynamic stochastic general equilibrium model with the aim of verifying how sensible this …

The Great Recession focused attention on large financial institutions and systemic risk. We investigate whether large … economies or too-big-to-fail subsidies. Estimating scale economies is made more complex by risk-taking. Better diversification … resulting from larger scale generates scale economies but also incentives to take more risk. When this additional risk …

products and services to informationally opaque customers, their ability to diversify credit and liquidity risk, and how they … liabilities to reduce the probability of bank runs. These aspects of banking affect a bank’s choice of risk vs. expected return …, which, in turn, affects bank performance. Banks have an incentive to reduce risk to protect the valuable charter from …

business creation in a world where new business owners are exposed to idiosyncratic risk due to initial imperfect … diversification. This paper uses this framework to analyze how entrepreneurial risk has changed over time and how this has affected … employment in the US. Conditions are provided under which entrepreneurial risk can be identified using micro data on the size …

risk hazard regressions on the outcomes of the loans. The authors show that when the expected unemployment risk of … dynamic adverse selection that can worsen the risk characteristics of new lending, and suggests another avenue by which the …