revolutions, the nature of this uncertainty changes from idiosyncratic to systematic. The resulting "bubbles" in stock prices are … observable ex post but unpredictable ex ante, and they are most pronounced for technologies characterized by high uncertainty and …

political uncertainty is priced in the equity option market as predicted by theory. Options whose lives span political events …We empirically analyze the pricing of political uncertainty, guided by a theoretical model of government policy choice …. To isolate political uncertainty, we exploit its variation around national elections and global summits. We find that …

We analyze how changes in government policy affect stock prices. Our general equilibrium model features uncertainty … average. The price fall is expected to be large if uncertainty about government policy is large, as well as if the policy … change is preceded by a short or shallow downturn. Policy changes increase volatility, risk premia, and correlations among …

horizon predictability, and a low volatility of the risk free rate. The model combines a rich payoff structure with a habit …

Our simple model features agents heterogeneous in skill and risk aversion, incomplete financial markets, and … redistributive taxation. In equilibrium, agents become entrepreneurs if their skill is sufficiently high or risk aversion … sufficiently low. Under heavier taxation, entrepreneurs are more skilled and less risk-averse, on average. Through these selection …