Risk and global economic architecture
why full financial integration may be undesirable
Edición de la obra Risk and global economic architecture
| Autor | Joseph E. Stiglitz |
|---|---|
| Editorial | National Bureau of Economic Research |
| Fecha de publicación | 2010 |
| Lugar | Cambridge, MA |
| Idioma | inglés |
| Formato | Electronic resource |
| LCCN | 2010655734 |
| Serie | NBER working paper series -- working paper 15718 · Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15718. |
| Número de Cutter | S855r |
"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.