Macro markets and financial security

Stefano Athanasoulis, Robert Shiller and Eric van Wincoop

Economic Policy Review, 1999, vol. 5, issue Apr, 39 pages

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: Income; Investments; Securities (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (19)

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