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Because of risk aversion, any sensible investment valuation system should value less Projects that contribute more to the aggregate risk, i.e., that have a larger income elasticity of net benefits. In theory, this is done by adjusting discount rates to consumption betas. But in reality, for...
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The literature has identified that countries with higher levels of openness tend to present a larger government sector … between openness and the size of government might be mediated by the quality of its public sector. While countries with weak … government capabilities will tend to rely on spending expansions to deal with trade-induced volatility, countries with stronger …
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