The first essay of this dissertation is a joint work with Fabrizio Perri in which we address one of the major shortcomings of real business cycle models: their lack of an internal propagation mechanism of the shocks. We thus develop an open economy two-sector model and show that is able to...

We study the causes and the consequences of limited risk sharing in two areas macroeconomics: the transmission of international business cycles and the welfare effect of taxes. The first two chapters focus on international business cycles, since earlier work has shown that models with perfect...