International Risk Sharing and the Transmission of Productivity Shocks

This paper shows that standard international business cycle models can be reconciled with the empirical evidence on the lack of consumption risk sharing. First, we show analytically that with incomplete asset markets productivity disturbances can have large uninsurable effects on wealth, depending on the value of the trade elasticity and shock persistence. Second, we investigate these findings quantitatively in a model calibrated to the U.S. economy. With the low trade elasticity estimated via a method of moments procedure, the consumption risk of productivity shocks is magnified by high terms of trade and real exchange rate (RER) volatility. Strong wealth effects in response to shocks raise the demand for domestic goods above supply, crowding out external demand and appreciating the terms of trade and the RER. Building upon the literature on incomplete markets, we then show that similar results are obtained when productivity shocks are nearly permanent, provided the trade elasticity is set equal to the high values consistent with micro-estimates. Under both approaches the model accounts for the low and negative correlation between the RER and relative (domestic to foreign) consumption in the data—the "Backus–Smith puzzle".     

Bank Mergers, Competition, and Liquidity

We model the impact of bank mergers on loan competition, reserve holdings, and aggregate liquidity. A merger changes the distribution of liquidity shocks and creates an internal money market, leading to financial cost efficiencies and more precise estimates of liquidity needs. The merged banks may increase their reserve holdings through an internalization effect or decrease them because of a diversification effect. The merger also affects loan market competition, which in turn modifies the distribution of bank sizes and aggregate liquidity needs. Mergers among large banks tend to increase aggregate liquidity needs and thus the public provision of liquidity through monetary operations of the central bank.     

第四届布拉格双年展

"尽管艺术总监们将展览描述为‘超低预算的双年展',第四届布拉格双年展依然成功地将贫穷转化成了财富。展览的筹备、组织,甚至开幕无一不面临着严峻的形势,然而,这样的条件却成就了策展项目以及艺术家的某些作品内在的力量和坚实的品质。无论是前来参观的观众们,还是细心观摩作品的人士,大家都十分明白这点(金融海啸)!至于我的发现:比如艺术家Barbora Zurkova e Radim Zurek的双折摄影,Michele Tocca生动的小幅画作,波兰艺术家Basia Banda标新立异的作品,还有墨西哥艺术家Guillermo Santamarina向一面石膏板扔LP黑胶唱片的行为表演,以及叶永青随意潦草的笔触下精致的图像。"DomenicO Quaranta艺术批评家、策展人第四届布拉格双年展"超清"(Hyper-Lucid)单元策展人