Castrén, Olli; Miller, Marcus; Stiegert, Roger - 2003
to shocks. We use a stylised two-bloc, two-period model of the global economy, with a simple stochastic productivity … shock affecting only one country. Efficient global risk-sharing imply that expected productivity gains in one country will … for the productivity gains can further increase the risk exposure of foreign shareholders. The model is calibrated to show …
