's vulnerability to periods of heightened risk and uncertainty. This paper develops a framework to evaluate such vulnerabilities. It … and explore how they are affected by domestic and global risk. We apply this framework to ten OECD economies, showing the … Kingdom, show that a substantial degree of international risk sharing can occur through current accounts and international …

We discuss how cross-country unemployment insurance can be used to improve international risk sharing. We use a two … international risk sharing concerns enter the unemployment insurance trade-off. We calibrate our model to Eurozone data and find …

We extend the canonical income process with persistent and transitory risk to shock distributions with left …-skewness and excess kurtosis, to which we refer as higher-order risk. We estimate our extended income process by GMM for household … show that in a standard incomplete-markets life-cycle model, first, higher-order risk has sizable welfare implications …

According to current regulation, European banks can apply zero risk weights to sovereign exposures in their balance … sheet, irrespective of the assigned rating. We show that a zero risk weighting of sovereign bonds has implications by … introduced via a penalty function that punishes banks if they deviate from the target capital ratio. We study the zero risk …