growth. At early stages of development, the presence of indivisible projects limits the degree of risk …-spreading (diversification) that the economy can achieve. The desire to avoid highly risky investments slows down capital accumulation and the … equilibrium is inefficient because individuals do not take into account their impact on the diversification opportunities of …

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk … assets. We show that this undermines the traditional result that higher capital reduces excess risk-taking driven by limited … liability. Moreover, higher capital may have an unintended e¤ect of enabling banks to take more tail risk without the fear of …

assess and price the risk of default. In order to analyse default risk in the macroeconomy, a simple general equilibrium … model with banks and financial intermediation is constructed in which default-risk can be priced. It is shown how the credit … spread can be attributed largely to the risk of default and how excess loan creation may emerge due different attitudes to …

to these scenarios affect the upside and downside risks embodied in the baseline real-time oil price forecast. Such risk …

This paper analyses the impact of public disclosure of banks’ risk exposure on banks’ risk taking incentives and its … their loan portfolio, public disclosure reduces the probability of banking crises. When asset risk is driven largely by … between asset risk and the deposit rate demanded by informed depositors. …

This paper studies the impact of competition on the determination of interest rates, and on banks’ risk taking … lower entry costs foster competition in deposit rates and reduce banks’ incentives to limit risk exposure. While higher … insurance coverage amplifies this effect, two alternative arrangements (risk based contributions to the deposit insurance fund …

inequality and raises unemployment, but expected welfare gains are ensured if workers are risk neutral. And while wage inequality …

This paper provides a critical survey of the methods employed to model the effects of risk in econometric models. Most … procedure used in the paper is to directly estimate the conditional variance (risk) by non-parametric estimators. Applications … are made to foreign exchange markets, interest rates and unemployment/inflation risk relations. …

Recent empirical work suggests a strong connection between the incentives money managers are offered and their risk … not only effort exertion but also risk taking behavior. The moral hazard problem with risk taking involves an incentive …-compatibility constraint on risk, which we characterize. We distinguish between one period and several periods. In the former case, under mild …