We provide the planner's solution to a model where households learn from exogenous natural disaster arrivals about arrival rates and spend to mitigate future damages. Mitigation cannot be decentralized due to positive externalities from curtailing aggregate risks. First-best can be implemented...

This article develops a basic typological framework for understanding and analyzing financial risk from a political economy perspective. It is motivated by growing awareness of the contemporary significance of financial risk and by the fact that the political-economic literature on such risk...