simulations of natural disasters and various insurance options, we find that sovereign decisions on optimal risk transfer involve … ex-ante preparedness is needed to manage the risks. The paper discusses sovereign experience with disaster insurance as a … key instrument to mitigate the risks; proposes ways to judge the adequacy of insurance; and considers ways to enhance its …

invest prudently and so reduce bank risk taking. This systemic insurance effect will be relatively more important when …We revisit the link between bailouts and bank risk taking. The expectation of government support to failing banks … creates moral hazard—increases bank risk taking. However, when a bank’s success depends on both its effort and the overall …

increased moderately. This de-leveraging effect is stronger for firms exposed to significant rollover risk, while firms whose …

develop a macro-financial structural model with two novel features. First, we include idiosyncratic and aggregate risk in a …

We augment a linearized dynamic stochastic general equilibrium (DSGE) model with a tractable endogenous risk mechanism … their conditional distributions. In particular, the model matches the key stylized facts of growth at risk. Accounting for …

sectors via the destruction of capital stocks and jumps in risk premia. These disruptions often entail negative feedback e … explore this causal nexus and the e?ects of rare large disasters resulting in capital losses and rising risk premia. Our …