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

superior. The intuition is simple: if underlying technologies are not convex, then risk-sharing can lower expected utility. The … simplistic models arguing for financial integration typically employed in economics assume convexity; but the world is rife with … likelihood of a bankruptcy cascade, "contagion," and systemic risk …

real shocks between the U.S. and the rest of the world has declined. We then present a model in which international …

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 …

Large and persistent global financial imbalances need not be the harbinger of a world financial crash. Instead, we show …

allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We … second-best world, financial integration can increase the welfare benefits of liquidity requirements …

This paper considers the meaning of domestic and international systemic risk. It examines scenarios that have been … adduced as creating systemic risk both within countries and among them. It distinguishes between the concepts of real and … pseudo-systemic risk. We examine the history of episodes commonly viewed either as financial crises or as evidencing systemic …