Extreme Events, Information and Dependence in Finance and the Environment

Extreme events and international spillovers are very compelling in 2012, whether caused by natural disasters such as earthquakes, or political economy such as Greek's debt crisis and uprisings in the Middle East. Inevitably, big disasters affect the econo mic sector. Climate change and financial crises can have human causes. Beyond that, there is little consensus. The current state of the art suffers from a big knowledge gap: we cannot fully explain extreme dependence in finance and the environment, and w e are puzzled about repeated failures of the financial system. We will build a framework to start addressing this knowledge gap, as described above.