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This paper focuses on four major aggregate stock price indexes (SP 500, Stock Europe 600, Nikkei 225, Shanghai Composite) and two “safe-haven” assets (Gold, Swiss Franc), and explores their return co-movements during the last two decades. Significant contagion effects on stock markets are documented during almost all financial crises; moreover, in line with the recent literature, the defensive role of gold and the Swiss Franc in asset portfolios is highlighted. Focusing on a new set of macroeconomic and financial series, a significant impact of these variables on stock returns correlations is found, notably in the case of the world equity risk premium. Finally, long-run risks are detected in all asset portfolios including the Chinese stock market index. Overall, this empirical evidence is of interest for researchers, financial risk managers and policy makers.

This paper reassesses the sustainability of fiscal policy in India from 1950 to 2010. Overall, the evidence provides a large support to the hypothesis that fiscal policy is “weakly” sustainable, and documents a higher speed of adjustment towards the intertemporal budget constraint with respect to earlier contributions. Notwithstanding this improvement in the fiscal outlook, I suggest that India should pursue a policy of fiscal consolidation in the years ahead, both because the ratio of public debt to GDP is still high compared with other emerging market countries, and because “weak” fiscal solvency implies potential adverse consequences on the management of public debt