aggregate risk. We propose a theory to explain these risk exposures. We study a financial accelerator model where entrepreneurs … inefficiently high risk exposure for entrepreneurs …

risk. These connections lead to two different network structures. In a clustered network groups of financial institutions … expectations are low, they do not roll over the debt and there is systemic risk in that all institutions are early liquidated. We …

expected exchange rate depreciations (appreciations) for high (low) interest rate currencies, suggesting that disaster risk is … priced in currency markets. To study the price of disaster risk, we propose a simple structural model that includes both … Gaussian and disaster risk and can be estimated even in samples that do not contain disasters. Estimating the model over the …

heterogeneous attitudes towards crash risk. The less crash-averse insure the more crash-averse through the options markets that … literature: the tendency of stock index options to overpredict volatility and jump risk, the Jackwerth (2000) implicit pricing …

valuations from consequences of exposure to financial markets. We demonstrate the empirical relevance of this theory for the … an especially informative metric for distinguishing the asset insulator theory from Modigliani-Miller or other standard …

past gains and losses on investors' risk aversion. The paper first presents a simple model examining how heterogeneous … changes in investors' risk aversion affects portfolio decisions and stock prices. Second, the paper shows empirically that …