Globalization and risk sharing
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- dc.contributor.author Broner, Fernando
- dc.contributor.author Ventura, Jaume
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2020-05-25T09:26:54Z
- dc.date.available 2020-05-25T09:26:54Z
- dc.date.issued 2005-10-01
- dc.date.modified 2017-07-23T02:09:18Z
- dc.description.abstract We study the effects of globalization on risk sharing and welfare. Like previous literature, we assume that countries cannot commit to repay their debts. Unlike previous literature, we assume that countries cannot discriminate between domestic and foreign creditors when repaying their debts. This creates novel interactions between domestic and international trade in assets. (i) Increases in domestic trade raise the bene.ts of enforcement and facilitate international trade. In fact, in our setup countries can obtain international risk sharing even in the absence of default penalties. (ii) Increases in foreign trade .i.e. globalization.raise the costs of enforcement and hamper domestic trade. As a result, globalization may worsen domestic risk sharing and lower welfare. We show how these e¤ects depend on various characteristics of tradable goods and explore the roles of borrowing limits, debt renegotiations, and trade policy.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=837
- dc.identifier.citation Review of Economic Studies, 78 (1), 49-82, 2011
- dc.identifier.uri http://hdl.handle.net/10230/1208
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 837
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword globalization
- dc.subject.keyword risk sharing
- dc.subject.keyword sovereign risk
- dc.subject.keyword domestic markets
- dc.subject.keyword international markets
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Globalization and risk sharing
- dc.type info:eu-repo/semantics/workingPaper