multiple of the banks' own capital. The second ingredient is the banks' high exposure to aggregate shocks: banks' assets have … positively correlated returns. Finally the third ingredient is the ease with which modern banks can reallocate capital between … these contracts are not socially optimal: banks' decisions of reallocating capital react too strongly to aggregate shocks …

This paper analyses the effects of disease and war on the accumulation of human and physical capital. We employ an … altruism, make decisions about investments in schooling and reproducible capital. A poverty trap exists for a wide range of … is more concave than that for the children's human capital, the only possible steady-state growth path involves full …