Risk and global economic architecture
Subtitle: why full financial integration may be undesirable
By: Joseph E. Stiglitz.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15718; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15718.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper provides a general framework for analyzing the optimal degree and form of financial integration.  Full integration is not in general optimal: faced with a choice between two polar regimes, full integration or autarky, autarky may be superior.  The intuition is simple: if underlying technologies are not convex, then risk-sharing can lower expected utility.  The simplistic models arguing for financial integration typically employed in economics assume convexity; but the world is rife with non-convexities, e.g.  associated with bankruptcy.  The architecture of the credit market can, for instance, affect the likelihood of a bankruptcy cascade, "contagion," and systemic risk"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 3/9/2010.

Includes bibliographical references.

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