This paper asks a few key questions relevant for active risk parity portfolio construction. Given the dynamic nature of financial markets, especially in the aftermath of the financial crisis, we believe systematically answering these questions within a transparent conceptual framework is...

This chapter is structured in three parts. The first part outlines the methodological steps, involving both theoretical and empirical work, for assessing whether an observed allocation of resources across countries is efficient. The second part applies the methodology to the long-run allocation...