. - Financial development ; Growth ; Volatility ; Diversification ; Mean-variance effciency …We study how financial market effciency affects a measure of diversification of output across industrial sectors … and for various levels of disaggregation, we construct a benchmark measure of diversification as the set of allocations of …

We study the effect of financial markets on "optimal" diversification defined in the spirit of mean-variance efficiency … as a pattern of output reallocation across industrial sectors which simultaneously accounts for the sectors' growth …, volatility, and correlations. Our findings imply that financial markets increase substantially the speed with which the observed …

We study how financial market efficiency affects a measure of diversification of output across industrial sectors … and for various levels of disaggregation, we construct a benchmark measure of diversification as the set of allocations of … aggregate output across industrial sectors which minimize the economy's long-term volatility for a given level of long …

The choice of instruments for mitigating economic volatility is a serious consideration for policymakers and important … markets are more effective than conventional economic policies, such as fiscal interventions, in reducing economic volatility …

This paper provides evidence that domestic opportunities to share risk have contributed to slower growth. We first … provide a simple model economy that demonstrates how a country's ability to diversify risk is linked to its growth rate. In … domestic opportunities to diversify risk and growth. We employ two econometric procedures: (1) traditional instrumental …

primarily from convergence in the volatility of state output growth, rather than in its average. The realized industry shares of …. On the basis of observed growth in sectoral value-added output, we calculate for each state the efficient frontier for … that financial development has important consequences for efficiency and specialization (or diversification) of investments …

(1) level and risk dynamics. The latter includes (2) tail risk and crisis probability as well as (3) the Volatility …