Catastrophe bonds feature full collateralization of the underlying risk transfer, and thus abandon the insurance principle of economizing on collateral through diversification. We examine the theoretical foundations beneath this paradox, finding that fully collateralized instruments have...

We study the spatial and temporal determinants of terrorism risk in Israel, using a geocoded database of Israeli terrorist attacks from 1949 to the present. In selecting targets, terrorists seem to respond rationally to costs and benefits: they are more likely to hit targets more accessible from...

Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial risk. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of future disease. We present an alternative framework...