title: Financial Integration with Heterogeneous Beliefs
creator: Rieger, Jörg
subject: ddc-330
subject: 330 Economics
description: In this paper we study the effects of financial integration on risk-sharing. Conventional macroeconomic theory suggests that the integration of financial markets improves welfare. In contrast to the literature we assume that households have heterogeneous beliefs. Because of the differences in beliefs, households are not only sharing the risk but also speculating. We show that with speculation, financial integration can increase the risk in the economy and that a full financial integration is not always beneficial. We also have a numerical example for a small set of countries and show that the losses due to heterogeneous beliefs are small.
date: 2014-06
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/17058/1/Rieger_2014_dp568.pdf
identifier: DOI:10.11588/heidok.00017058
identifier: urn:nbn:de:bsz:16-heidok-170588
identifier:   Rieger, Jörg  (2014) Financial Integration with Heterogeneous Beliefs.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/17058/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng