Existing wisdom links increased openness to trade to greater macroeconomic volatility, as trade induces a country to specialize, increasing its exposure to sector-specific shocks. Evidence suggests, however, that country-wide shocks are at least as important as sectoral shocks in shaping...

We establish a theoretical as well as empirical framework to assess the role of geography for inter-State conflict. The theory shows that two related sources of asymmetry are important triggers of war motivations: if in a pair of neighboring countries only one of them has natural resources, and...

We present a model of shadow banking in which banks originate and trade loans, assemble them into diversified portfolios, and finance these portfolios externally with riskless debt. In this model: outside investor wealth drives the demand for riskless debt and indirectly for securitization, bank...