eprintid: 17058
rev_number: 22
eprint_status: archive
userid: 2744
dir: disk0/00/01/70/58
datestamp: 2014-06-18 11:51:21
lastmod: 2016-01-17 11:52:55
status_changed: 2014-06-18 11:51:21
type: workingPaper
metadata_visibility: show
creators_name: Rieger, Jörg
title: Financial Integration with Heterogeneous Beliefs
subjects: ddc-330
divisions: i-181000
keywords: Heterogeneous Beliefs, Financial Integration, Incomplete Markets
abstract: 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
id_scheme: DOI
id_number: 10.11588/heidok.00017058
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0568
ppn_swb: 1658293428
own_urn: urn:nbn:de:bsz:16-heidok-170588
language: eng
bibsort: RIEGERJORGFINANCIALI201406
full_text_status: public
series: Discussion Paper Series, University of Heidelberg, Department of Economics
volume: 0568
place_of_pub: Heidelberg
pages: 26
citation:   Rieger, Jörg  (2014) Financial Integration with Heterogeneous Beliefs.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/17058/1/Rieger_2014_dp568.pdf