The paper tests three hypotheses concerning foreign equity investment in the presence of liquidity risk. First, the FDI …-to-FPI price differential is negatively related to liquidity risk (the "Price Discount Hypothesis"). The idea is that market …

the U.S. would experience a sudden stop of capital flows, which would unavoidably drag the world economy into a deep … instead that the root imbalance was of a different kind: The entire world had an insatiable demand for safe debt instruments … of exposing the economy to a systemic panic. This structural problem can be alleviated if governments around the world …

Investor confidence and risk tolerance are important concepts that investors are constantly trying to gauge. Yet these … in fundamental value. In this paper, we take an alternative approach by looking at the world-wide holdings and trading of … changes in demand and fundamentals perceived by all investors, and a second that reflects changes in the relative risk …

's vulnerability to periods of heightened risk and uncertainty. This paper develops a framework to evaluate such vulnerabilities. It … they are affected by domestic and global risk shocks, and apply this framework to 10 OECD economies. These examples …, including a more detailed assessment for the UK, show that a substantial degree of international risk sharing can occur through …

an additional hedging motif driven by the interaction between real exchange rate risk and ambiguity aversion. What … matters is the long-run as opposed to the short-run risk. Domestic equity is a good hedge with respect to long-run real … exchange rate risk even when bonds are traded. The higher is the degree of ambiguity aversion, the stronger is the home bias …

Disparity between control and ownership rights gives rise to the risk of tunneling by the controlling shareholder, and …

been empirically estimated as a test of international portfolio diversification and risk sharing. In this paper we … international consumption correlations even in the absence of any international risk sharing. Empirical evidence presented in this …