of optimal risk-sharing in mortgage contracts. But since only a small literature has studied this question, more research … termination via prepayment or default affects optimal risk-sharing. The broad conclusion of the analysis is that potential … mortgage termination makes higher risk exposure for borrowers optimal. …

measure of secession risk and perform the comparative static analysis of the equilibrium policy location and of the secession … risk with respect to the cultural distinctiveness of the two regions, the relative weight attached by voters to economic …-regional heterogeneity of preferences. -- majority voting ; secession risk ; cultural distinctiveness ; conflict ; overlapping regional …

We develop a model of education where individuals face educational risk. Successfully entering the skilled labor sector … depends on individual effort in education and public resources, but educational risk still causes (income) inequality. We show … in a Second-best setting. Contrary to standard models of income risk, it is not optimal to use a proportional wage tax …

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …