myopic politicians face political risk and prefer to extract political rents as early as possible. An implication of this …

assumptions: Economic risk is high relative to political risk, markets are sufficiently incomplete, and there exists a rent …

explicitly absorb a larger share of the systemic risk. The options for doing this range from surplus countries rebalancing their … securitization industry while removing the systemic risk from the banks' balance sheets. Such public-private solutions could be …

In this paper we: (i) provide a model of the endogenous risk intolerance and severe aggregate demand contractions … addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the … economy and brings down asset prices, risk-tolerant agents' wealth share declines and their leverage rises endogenously. This …

We present a model of flight to quality episodes that emphasizes financial system risk and the Knightian uncertainty …

The standard version of q theory, in which investment is positively related to marginal q, breaks down in the presence … investment and marginal q can be either positive or negative. Given certain homogeneity assumptions, a version of the theory …