Acharya, Viral V.; Iyer, Aaditya M.; Sundaram, Rangarajan K. - In: Journal of Risk and Financial Management 13 (2020) 8, pp. 1-18
We address the paradox that financial innovations aimed at risk-sharing appear to have made the world riskier. Financial innovations facilitate hedging idiosyncratic risks among agents; however, aggregate risks can be hedged only with liquid assets. When risk-sharing is primitive, agents...
