dividend yield--would be close to the risk-free rate, estimated to be around 1%. We study these properties within an asset ….1%) confidence band along with a small risk premium for gold. In this scenario, the bulk of gold's expected return corresponds to the … appreciation. Nevertheless, the uncertainty in gold returns is concentrated in the price-change component. The model can explain …

welfare cost of aggregate consumption uncertainty. In the baseline simulation, the welfare cost of disaster risk is large … with key asset-pricing observations. If the coefficient of relative risk aversion equals 3-4, the model accords with … observed equity premia and risk-free real interest rates. If the intertemporal elasticity of substitution is greater than one …