international equity transactions that accentuate the role of international risk sharing as a factor for the macroeconomic response … 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 …

The U.S. could be the source of the global financial risk because it longs risky assets and shorts safe assets in the … international capital market. This paper builds a stylized two-country model to highlight that when the developed country's risk …-bearing capacity improves, it holds more foreign risky assets and issue more risk-free debt. The foreign country's risk …

liability side, allowing investors sell domestic and foreign bonds and capturing changes in counterparty risk in a stylized way … prices are mainly affected by financiers' concern for counterparty risk: impact effects are deep and in line with the terms … cumulative effects have instead more mixed results on fluctuations. -- borrowing limits ; counterparty risk ; financial flows …

experiencing a favourable supply side shock consumes more against expected future output and spreads the risk by selling shares …