Browsing Department of Economics by Author "Caballero, Ricardo"

Now showing items 1-3 of 3

    • A Caricature (Model) of the World Economy 

      Caballero, Ricardo (Cambridge, MA: Department of Economics, Massachusetts Institute of Technology, 2010-11-23)
      This paper provides a stylized model of the workings of a global economy where one of its key driving factors is economic agents’ continuous struggle to find assets in which to park financial resources. This struggle ...

    • Carry Trade and Systemic Risk: Why are FX Options so Cheap? 

      Caballero, Ricardo; Doyle, Joseph B. (Cambridge, MA: Department of Economics, Massachusetts Institute of Technology, 2012-12-05)
      In this paper we document first that, in contrast with their widely perceived excess returns, popular carry trade strategies yield low systemic-risk-adjusted returns. In particular, we show that carry trade returns are ...

    • Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome 

      Caballero, Ricardo (Cambridge, MA: Department of Economics, Massachusetts Institute of Technology, 2010-09-27)
      In this paper I argue that the current core of macroeconomics—by which I mainly mean the so-called dynamic stochastic general equilibrium approach—has become so mesmerized with its own internal logic that it has began to ...