1 / 5

Sudden Spikes in Global Risk

Sudden Spikes in Global Risk. Written by Bacchetta & van Wincoop Presented by Seth Leonard Discussed by João Cunha. Summary. Risk Panic Disconnect from Macro Fundamentals Two country OLG static model with closed-form analytical solution Self-fulfilling. Summary. Very tractable

ford
Download Presentation

Sudden Spikes in Global Risk

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Sudden Spikes in Global Risk Written by Bacchetta & van Wincoop Presented by Seth Leonard Discussed by João Cunha

  2. Summary • Risk Panic • Disconnect from Macro Fundamentals • Two country OLG static model with closed-form analytical solution • Self-fulfilling

  3. Summary • Very tractable • Multiple Equilibria • Contribution to the Risk Panics literature

  4. Extensions • OLG structure • Constant interest rate on bonds • Booms\Bubble • Triggers of (Global) Risk Panics

  5. Alternative Arguments • Credit Crunch • Reduction of Leveraged Positions • Losses in the Financial Markets • Expectations

More Related