carry the risk of contagion. In this paper we investigate how banks decide on direct balance sheet linkages and the … implications for contagion risk. In particular, we model a network formation process in the banking system. The trade-off between …

. At the transition point there is a jumpin risk taking, as private banks do not internalize the social costs of bank … failure. To discourage private risk taking, the politician leaves more rentsto private banks.We conclude with some suggestive …

There has been a revival of interest in the effect of risk on economic growth. We quantify both ex ante and ex post … effects of risk using a stochastic version of the Ramsey model. We develop a simulation-based econometric methodology which … remarkable long-running panel data set for rural households in Zimbabwe. We find that risk substantially reduces growth: in the …

The risk of investment in schooling has largely been ignored. We assess thevariance in the rate of return by surveying … skewed. Our best guess of ex ante risk in university education is a coefficient ofvariation of about 0.3, comparable to that …

disparities - which hitherto has received limited attention - is the risk people face about their future health. This paper … integrates risk into the standard inequality measurement which measures the extent to which disparities in realized health are … account for risk averse preferences in the assessment of income-related health inequalities. The empirical application using …

We study the optimal taxation of risk-free and excess capital income with heterogeneous rates of return, alongside an … optimal nonlinear earnings tax. Households can hold three assets: one risk-free, one risky but diversifiable, and one a … private investment with idiosyncratic risk whose expected return differs among households. Contrary to expectations, the …