@article{Obstfeld:233197,
      recid = {233197},
      author = {Obstfeld, Maurice},
      title = {Risk-Taking, Global Diversification, and Growth},
      address = {1993-07},
      number = {1554-2016-132516},
      series = {Working Paper},
      pages = {54},
      year = {1993},
      abstract = {This paper develops a stochastic continuous-time model in  which international risk sharing can yield substantial  welfare gains through its positive effect on expected  consumption growth. The mechanism linking global  diversification to growth is an attendant world portfolio  shift from safe but low-yield capital into riskier  high-yield capital. The presence of these two types of  capital is meant to capture the idea that growth depends on  the availability of an ever-increasing array of  specialized, hence inherently risky, production inputs.  Calibration exercises based on international consumption  and stock market data imply that most countries reap large  steady-state welfare gains from global financial  integration.},
      url = {http://ageconsearch.umn.edu/record/233197},
      doi = {https://doi.org/10.22004/ag.econ.233197},
}