This paper investigates the potential impacts of the degree of divergence in open macroeconomic policies in the context of the trilemma hypothesis. Using an index that measures the relative policy divergence among the three trilemma policy choices, namely monetary independence, exchange rate...

This paper investigates the impact of the history of crises on macroeconomic performance. We first study the impact of past banking crises on the probability of a future banking crisis. We do not detect a learning process from past banking crises. Countries that have already experienced one...

This study reports that numerous direct and indirect international risk-sharing mechanisms exist, including (1) self-insurance at the state level, (2) market-based tools, (3) international labor mobility, (4) implicit hedges provided by macroeconomic flexibility, and (5) transfers and access to...