Chicago Booth’s Brent Neiman and his coauthors have used micro data to construct a new picture of country-level investment portfolios.
The prevalence of offshore financing could make it hard to size up the risks of a corporate debt crisis or to design policies in response to one.
Investors may be more averse to currency risk than previously thought.
Investors' currency preferences skew their portfolios.
Economists and policymakers have yet to reach a consensus about how much we should pay now to avert this catastrophe, but research suggests we may want to pay hundreds of billions of dollars today to ward off trillions in future damages.