scholarly journals World Income Components: Measuring and Exploiting Risk-Sharing Opportunities

2001 ◽  
Vol 91 (4) ◽  
pp. 1031-1054 ◽  
Author(s):  
Stefano G Athanasoulis ◽  
Robert J Shiller
Keyword(s):  
Risk Premium ◽  
Risk Sharing ◽  
Absolute Risk ◽  
Optimal Contract ◽  
Optimal Contracts ◽  
Variance Matrix ◽  
The World ◽  
Penn World Table ◽  
World Income ◽  
Table Data

A method is constructed for decomposing the variance of changes in incomes in the world into components, to indicate the most important risk-sharing opportunities among people of the world. A constant absolute risk premium (CARP) model, an intertemporal general-equilibrium model of the world, is presented to permit optimal contract design. For a contract designer maximizing a social welfare function, the optimal contracts maximize the equilibrium world real interest rate. Securities are defined in terms of eigenvectors of a transformed variance matrix. The method is applied using Penn World Table data on the G-7 countries, 1950–1992. (JEL F00, G00, G10)

scholarly journals Optimal Contracts, Aggregate Risk, and the Financial Accelerator

2016 ◽  
Vol 8 (1) ◽  
pp. 119-147 ◽  
Author(s):  
Charles T. Carlstrom ◽  
Timothy S. Fuerst ◽  
Matthias Paustian
Keyword(s):  
Risk Premium ◽  
Household Consumption ◽  
Optimal Contract ◽  
Financial Accelerator ◽  
Optimal Contracts ◽  
Aggregate Risk ◽  
Return On Capital ◽  
Internal Funds

This paper derives the optimal lending contract in the financial accelerator model of Bernanke, Gertler, and Gilchrist (1999), henceforth, BGG. The optimal contract includes indexation to the aggregate return on capital, household consumption, and the return to internal funds. This triple indexation results in a dampening of fluctuations in leverage and the risk premium. Hence, compared with the contract originally imposed by BGG, the privately optimal contract implies essentially no financial accelerator. (JEL D11, D81, D86, D92, E13, G31, L26)

Disclosure and Secrecy in Employee Monitoring

2010 ◽  
Vol 22 (1) ◽  
pp. 187-208
Author(s):  
Mitchell A. Farlee
Keyword(s):  
Risk Aversion ◽  
Moral Hazard ◽  
Monitoring System ◽  
Risk Premium ◽  
Risk Sharing ◽  
Limited Liability ◽  
Efficient Production ◽  
System A ◽  
Liability Risk ◽  
Employee Monitoring

ABSTRACT: Disclosure and monitoring policy are studied, where disclosure relates to information about the monitoring system. A moral hazard model is presented where employee monitoring occurs with some exogenous probability and the owner privately learns whether he will be monitoring before the employee chooses his productive action. Disclosure policy is an owner choice between revealing to the employee whether he will be monitoring before the action (Disclosure) or remaining silent (Secrecy). The results rely on the joint presence of risk aversion and limited liability. Risk aversion creates an efficiency/risk tradeoff where secrecy obtains risk-sharing benefits. Limited liability reduces these benefits, allowing preference for disclosure. Lower monitoring probabilities increase the risk premium required to obtain effort with secrecy. For small monitoring probabilities, disclosure is preferred even though less efficient production is achieved, because disclosure provides a greater risk-sharing benefit. For high monitoring probabilities, secrecy is preferred because it leads to greater efficiency despite a greater risk premium.

WIID Companion (March 2021): integrated and standardized series

2021 ◽  
Author(s):  
Carlos Gradín
Keyword(s):  
Income Distribution ◽  
Technical Note ◽  
Net Income ◽  
Annual Series ◽  
Previous Note ◽  
The World ◽  
Global Goal ◽  
World Income ◽  
Two Stages ◽  
General Regression

This document is part of a series of technical notes describing the compilation of a new companion database that complements the World Income Inequality Database. It aims at facilitating the analysis of inequality as well as progress in achieving the global goal of reducing inequality within and across countries. This new dataset also includes an annual series reporting the income distribution at the percentile level for all citizens in the world, regardless of where they live, since 1950 to present. A previous note described the selection of income distribution series. Since these series may differ across welfare concepts and other methods used, this technical note describes the second stage, constructing integrated and standardized country series. It discusses all the necessary adjustments conducted to construct the final series for each country, with consistent estimates of the distribution of net income per capita over the entire period for which information is available. This is mainly divided into two stages. First, integrating country series by interlinking series that overlap over time, then using a more general regression-based approach.

Prevailing Risk-Sharing Policies and Drivers of Disruption in the World of Work

2019 ◽  
pp. 27-60
Author(s):  
Truman Packard ◽  
Ugo Gentilini ◽  
Margaret Grosh ◽  
Philip O’Keefe ◽  
Robert Palacios ◽  
...  
Keyword(s):  
Risk Sharing ◽  
The World

Data Analysis on Global Stratification

2020 ◽  
pp. 355-378
Author(s):  
Kirti Raj Bhatele ◽  
Stuti Singhal ◽  
Muktasha R. Mithora ◽  
Sneha Sharma
Keyword(s):  
Data Analysis ◽  
Data Science ◽  
Graphical Representation ◽  
Heat Maps ◽  
Python Language ◽  
Graphical Data ◽  
Sentence Form ◽  
The World ◽  
Table Data ◽  
Numeric Data

This chapter will guide you through the modeling, uses, and trends in data analysis and data science. The authors focus on the importance of pictorial data in replacement of numeric data. In most situations, graphical representation of data can present the information more distinctly, informative, and in less space than the same information requires in sentence form. This chapter provides a brief knowledge about representing data to more understandable form such that any person whether layman or not can understand it without any difficulty. This chapter also deals with the software Tableau which we use to convert the table data into graphical data. This Chapter contains 11 heat maps related to the world economies and their detailed study on several different topics. It will also give light on the basics of Python Language and its various algorithm studies to compare all the world economies based on their development.

Rational Expectations Equilibria

2017 ◽  
Author(s):  
Kerry E. Back
Keyword(s):  
Risk Premium ◽  
Risk Sharing ◽  
Rational Expectations ◽  
Average Precision ◽  
Equilibrium Prices ◽  
Expected Values ◽  
Normally Distributed

When differences in beliefs are due to differences in information, investors learn from prices. If there are no risk‐sharing motives for trade, then differences in information do not lead to trade (the no‐trade theorem). Equilibrium prices can fully reveal information, but then there is no incentive to gather information (the Grossman‐Stiglitz paradox). Noisy trades or asset supplies facilitate partially revealing equilibria. In the Grossman‐Stiglitz model and the Hellwig model, prices equal discounted expected values minus a risk premium term that depends on the average precision of investors’ information weighted by their risk tolerances. The chapter explains the mechanics of updating beliefs when fundamentals and signals are normally distributed.

scholarly journals Modeling economic growth fuelled by science and technology

2010 ◽  
Vol 40 (2) ◽  
pp. 319-340 ◽  
Author(s):  
Leonardo Costa Ribeiro ◽  
Ricardo Machado Ruiz ◽  
Américo Tristão Bernardes ◽  
Eduardo da Motta e Albuquerque
Keyword(s):  
Economic Growth ◽  
Science And Technology ◽  
Science Technology ◽  
The World ◽  
Scientific Papers ◽  
World Income ◽  
World Income Distribution ◽  
Wealth Of Nations ◽  
Simulation Exercises

This paper suggests a simulation model to investigate how science and technology fuel economic growth. This model is built upon a synthesis of technological capabilities represented by national innovation systems. This paper gathers data of papers and patents for 183 countries between 1999 and 2003, as well as GDP and population for 2003. These data show a strong correlation between science, technology and income. Three simulation exercises are performed. Feeding our algorithm with data for population, patents and scientific papers, we obtain the world income distribution. These results support our conjecture on the role of science and technology as sources of the wealth of nations.

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