cycle volatility (the "great moderation") and the large and persistent US external imbalance. In this paper we argue that an … external imbalance is a natural consequence of the great moderation. If a country experiences a fall in volatility greater than … cannot perfectly insure against. The model suggests that a fall in business cycle volatility like the one observed for the US …

volatility. This paper develops a simple model that can exhibit self-fulfilling fluctuations in the expected path for … unemployment. The novel feature is that the scope for sunspot-driven volatility depends on the level of household wealth. When …

Does macroeconomic volatility/uncertainty affects accumulation of net foreign assets? In OECD economies over the period … 1970-2012, changes in country specific aggregate volatility are, after controlling for a wide array of factors …, significantly positively associated with net foreign asset position. An increase in volatility (measured as the standard deviation …