Macro Markets and Financial Security

19 Pages Posted: 2 Aug 2007

See all articles by Stefano Athanasoulis

Stefano Athanasoulis

University of Notre Dame - Department of Finance

Robert J. Shiller

Yale University - Cowles Foundation; National Bureau of Economic Research (NBER); Yale University - International Center for Finance

Eric van Wincoop

University of Virginia - Department of Economics; National Bureau of Economic Research (NBER)

Abstract

Uncertainty about national income growth poses significant macroeconomic risk to households all over the world. To help reduce investors' exposure, researchers have proposed a controversial new set of security markets called macro markets. These international markets would trade long-term claims on the income of an entire country or region. For example, in a macro market for the United States, an investor could buy a claim on the U.S. national income and then receive dividends equal to a fraction of national income for as long as the claim is held. Although many barriers stand in the way of the markets' development - including investors' focus on short-term portfolio performance, sizable startup costs, and contract enforcement difficulties - the potential benefits of these markets are great.

Keywords: macro markets

JEL Classification: F36, G15, G23

Suggested Citation

Athanasoulis, Stefano and Shiller, Robert J. and van Wincoop, Eric, Macro Markets and Financial Security. Economic Policy Review, Vol. 5, No. 1, April 1999, Available at SSRN: https://ssrn.com/abstract=1004360

Stefano Athanasoulis (Contact Author)

University of Notre Dame - Department of Finance ( email )

P.O. Box 399
Notre Dame, IN 46556-0399
United States
219-631-3659 (Phone)
219-631-5255 (Fax)

Robert J. Shiller

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
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203-432-6167 (Fax)

HOME PAGE: http://www.econ.yale.edu/~shiller/

National Bureau of Economic Research (NBER) ( email )

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Yale University - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States
203-432-3708 (Phone)
203-432-6167 (Fax)

Eric Van Wincoop

University of Virginia - Department of Economics ( email )

Rouss Hall 114
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
804-924-3997 (Phone)
804-982-2904 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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