Globalization and risk sharing
By: Jaume Ventura, Fernando A. Broner
Contributors: Brone, Fernando A.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12482; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12482.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "This paper presents a theoretical study of the eÞects of globalization on risk sharing and welfare.  We model globalization as a gradual and exogenous increase in the fraction of goods that are tradable.  In the absence of frictions, globalization opens new goods markets and raises welfare.  We assume, however, that countries cannot commit to pay their debts.  Unlike the previous literature, and motivated by changes in the institutional setup of emerging-market borrowing, we also assume that countries cannot discriminate between domestic and foreign creditors when paying their debts.  Although globalization still opens new goods markets, we find that it can also open or close some asset markets.  The net eÞect on risk sharing and welfare of this process of creation and destruction of markets might be either positive or negative depending on a variety of factors that the theory highlights"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 9/7/2006.

Includes bibliographical references.

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