We explore intergenerational and international risk sharing in a general equilibrium multiple-country model with two-tier pensions systems. The exact design of the funded tier is key for the way in which risks are shared over the various generations. The laissez-faire market solution fails to...

Foreign direct investment (FDI) is seen as a way to import technology and catch up with economic leaders. It is therefore important to understand why some countries attract more investments by multinationals than others. We expand the set of common determinants of FDI with urban agglomerations...

Risk-adjusted LQG optimal control with perfect and imperfect observation of the economy is used to obtain prudent Taylor rules for monetary policies and cautious Kalman filters. A prudent central bank adjusts the nominal interest rate more aggressively to changes in the inflation gap, especially...

The global financial crisis has potentially many adverse effects on the developing world: falls in exports of goods and services to the OECD, dramatic falls in commodity prices and resource exports, and falls in remittances. Many of the poorer countries are heavily specialized and dependent on...