Foreign investors' changing appetite for risk-taking have been shown to be a key determinant of the global financial … cycle. Such fluctuations in risk sentiment also correlate with the dynamics of UIP premia, capital flows, and exchange rates …. To understand how these risk sentiment changes transmit across borders, we propose a two-country macroeconomic framework …

We present a dynamic two-country model in which military spending, geopolitical risk, and government bond prices are …

Recent trends suggest the world economy may be tending towards an equilibrium with two distinct trading blocs, each … internally integrated, but with significant isolation between the blocs. This paper uses a quantitative theory to explore how far … this bifurcation would need to go to pose a threat to the special role of the dollar in international exchange. The theory …

producing sector, when fiscal rules generate sustained fiscal surpluses, when the rest of the world has lower expansion …. The latter is more likely if bubbles develop along the expansionary path. These (rational) bubbles can emerge even when …

accounts for the interaction between temperature, economic growth and risk. The model simultaneously matches the projected … temperature path, the observed consumption growth dynamics, discount rates provided by the risk-free rate and equity market …

bonds, greater risk-bearing capacity in the U.S. than the rest of the world, and nominal rigidities. A flight to safety … generates a dollar appreciation and decline in global output. Dollar bonds thus command a negative risk premium and the U ….S. holds a levered portfolio of capital financed in dollars. We quantify the effects of safety shocks and heterogeneity in risk …

International risk-sharing has far-reaching implications both for economic policy and for basic research in economics …. When countries do not share risk, individuals in those countries experience fluctuations in their consumption levels that … are undesirable and possibly unnecessary. This paper extends and refines the study of international risk-sharing in two …

idiosyncratic entrepreneurial risk-- a risk that introduces, not only a precautionary motive for saving, but also a wedge between …