consumption across countries from the predictions of models with full risk sharing. It is commonly believed that these risk … that the full risk sharing equilibrium may not require much diversification of equity portfolios when there is price …

The foreign exchange risk premium in an exchange rate target zone regime with devaluation/realignment risks is derived … devaluation/realignment risk, is taken into account. The risk premium is then the sum of two separate risk premia, arising from … real and nominal exchange rate premia are considered. The real and nominal risk premia from movements within the band are …