This paper attempts to establish the existence of equilibrium, in an asset market inhabited by two representative investors with different risk aversions. In order to capture heterogeneity in information and wealth, the paper segments the investor population into two: (i) Individual investors...

In this paper, I study the impact of a global cap-and-trade system for greenhouse gas emissions on financial markets. The analysis is conducted using a general equilibrium production economy with two countries. One of the countries (developed country) introduces the system from the very...

In this paper, we conduct an analysis of the implications of capital controls for financial stability. We study a financial transaction (Tobin) tax applicable to cross-border capital flows in a multi-good, multi-country dynamic equilibrium model with incomplete financial markets and...

A dynamic pure-exchange general equilibrium model with uncertainty is studied. Fundamentals are supposed to depend continuously on states of nature. It is shown that: 1. if financial markets are complete, then asset prices vary continuously with states of nature, and; 2. if financial markets are...

When people share risk in financial markets, intermediaries provide costly enforcement for most trades and, hence, are an integral part of financial marketsu0092 organization. We assess the degree of risk sharing that can be achieved through financial markets when enforcement is based on the...

This paper reports the findings of Granger causality tests on the relationship between foreign direct investment (henceforth, FDI) and local financial market development across 62 countries from 1996 to 2007. In this paper we explore whether local financial market development is important in...

This paper examines the effects of structural changes in financial system on corporate finance and governance in Japan, and discusses the future directions. The primary purpose of the study is twofold: to identify important features of changes in financial system in Japan and their effects on...

The recent financial crisis has demonstrated that a failure of Systemically Important Financial Institutions (SIFIs) could seriously damage the stability of the financial system. A precise and consistent definition of a SIFI is pivotal to ensure efficient and effective regulation of the global...

The recent availability of large data sets covering single transactions on financial markets has created a new branch of econometrics which has opened up a new door of looking at the microstructure of financial markets and its dynamics. The specific nature of transaction data such as the...