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Globalization, inequality and economic policy

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Broll U., Kemnitz A., Mukherjee V.

Economics and Business Review

2019

vol. 5 (19)

issue 1

3-11

In our paper a very simple model is used to analyze the relationship between trade globalization, inequality and economic policy. Although the local government exclusively maximizes the welfare of the marginalized (unemployed) people, the inequality of relative consumption between employed and unemployed will increase with intensified trade liberalization. In contrast to this result the relative income inequality may fall in certain situations.

Risk sharing markets and hedging a loan portfolio: a note.

100%

Broll U., Guo X., Welzel P.

Economics and Business Review

2017

vol. 3(17)

issue 4

47-54

Our study features a financial institute facing credit risk. Hedging credit risk by offsetting an open position with an opposite one in the financial market is important for financial intermediaries, which are concerned with both the profitability and risk of their operations. As risk management is crucial for the financial institute, the issues of how it is optimally determined and how it adjusts to changes in the financial environment deserve closer scrutiny. We extend the analysis of hedging with financial instruments against credit risk to the case of multiple types of credit risk. We show that standard results on the optimal hedge ratio and risk management effectiveness in the case of one single source of credit risk to carry over a loan portfolio in a non-trivial but intuitive way. While we focus on credit risk and credit derivatives, our analysis can be easily applied to other financial assets, which can be traded in futures market.

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2 Economics and Business Review

2 Broll U.

1 Guo X.

1 Kemnitz A.

1 Mukherjee V.

1 Welzel P.

1 2019

1 2017

Search results

Globalization, inequality and economic policy

Risk sharing markets and hedging a loan portfolio: a note.