Date: 2009
Type: Thesis
Heterogeneous Individuals in the International Economy
Florence : European University Institute, 2009, EUI, ECO, PhD Thesis
BROER, Tobias, Heterogeneous Individuals in the International Economy, Florence : European University Institute, 2009, EUI, ECO, PhD Thesis - https://hdl.handle.net/1814/13214
Retrieved from Cadmus, EUI Research Repository
Does financial globalisation increase inequality? Should households with little financial wealth still hold foreign assets? Are consumption patterns of low income earners more dispersed than those of the rich? Do aggregate savings rise or fall when a society becomes more unequal? These are some of the questions I raise in this thesis. Its central theme is the role of individual heterogeneity in an international economy, with a focus on idiosyncratic risks and income inequality within countries. This allows me to look at some well-recognised policy issues from a new angle, such as the fall in the US current account, which I argue could be influenced by changes in the structure of domestic income inequality. But the combination of the individual with the international level of analysis also enables me to ask new questions, for example whether wealthier households are less biased towards domestic assets in their portfolio decisions than poorer households, and why this could be. The thesis can thus be understood as an attempt to link two literatures that have largely remained separate in the past: that on imperfect domestic risk-sharing, on the one hand, and the international economics literature on the other. This is especially true for chapters 1 and 2. They build on the analysis in chapters 3 and 4, which concentrate on an economic environment where risk-sharing is imperfect because agents cannot commit to honour financial contracts, and analyse the resulting equilibrium and its characteristics in a closed economy.
Additional information:
Defense date: 21/12/2009; Examining Board:
Prof. Giancarlo Corsetti, EUI
Prof. Dirk Krueger, University of Pennsylvania
Prof. Morten Ravn, University College London, Supervisor
Prof. Hélène Rey, London Business School
Cadmus permanent link: https://hdl.handle.net/1814/13214
Full-text via DOI: 10.2870/13714
Series/Number: EUI; ECO; PhD Thesis
Publisher: European University Institute
LC Subject Heading: International economic relations; International finance