virtually all diffusion models used in practice. Proposed are several interesting applications of our methodology, such as …

movement and whether stochastic volatility comes from jump or diffusion. We find that, to capture the behavior of the S&P 500 … to include stochastic volatilities from two separate sources: both the jump and the diffusion components …

This paper introduces a tractable, structural model of subjective beliefs. Since agents that plan for the future care … overestimate the return of their investment and underdiversify. In general equilibrium, agents' prior beliefs are endogenously … and overoptimistic, and consume more than implied by rational beliefs early in life. Third, in choosing when to undertake …