We develop a model of gestational surrogacy, in which a childless couple faces heterogeneous prospective surrogates. High-type surrogates add more value but also have higher outside options. Surrogates can make specific investments for the overall well-being (care) of the unborn child. We show...

The subprime crisis has shown us again that actual shocks in stressed markets are much more severe than historical scenarios. In this paper, we compare stress tests for foreign exchange positions, based on hypothetical scenarios, across a number of VaR methods. We conclude that volatility...

Foreign currency debt is widely believed to increase risks of financial crisis, especially after being implicated as a cause of the East Asian crisis in the late 1990s. In this paper, we study the effects of foreign currency debt on currency and debt crises and its indirect effects on short-term...