Macrofinancial risk analysis
Dale Gray and Samuel Malone
Macrofinancial Risk Analysis provides a new and powerful frameworkwith which policymakers and investors can analyze risk andvulnerability in economies, both emerging market and industrial.Using modern risk management and financial engineering techniquesapplied to the macroeconomy, an economic value can be placed on therisks posed by inter-linkages between sectors, the risk of defaultof different sectors on their outstanding debt obligationsquantified, and the value ex-ante of guarantees to private sectorentities by the government calculated. This book guides the readerthrough the basic macroeconomic and financial models necessary tounderstand the framework, the core analytical tools, and moreadvanced contributions that will be of interest to researchers.This unique synthesis of ideas from finance and macroeconomicsoffers several original contributions to the theory of financialcrises, as well as a range of new policy options for governmentsinterested in achieving a better tradeoff between economic growthand macro risk.