that anticipate the actual tax base incorrectly. I analyze the effects of stochastic taxation on investment behavior in a … the effects of both tax base and tax rate uncertainty, the investment's tax payment is modelled as a stochastic process …. Increased tax uncertainty has an ambiguous impact on investment timing. The view that tax uncertainty depresses real investment …

risk of firm default …

subjects form motivated beliefs to self-justify their excessive risk-taking. For the same investment opportunity, subjects …This paper investigates whether limited liability and moral hazard affect risk-taking through motivated beliefs. On the … invest more and are significantly more optimistic about the success of the investment if their failure can harm others. We …

We assess to which degree an international transfer mechanism can enhance consumption risk sharing as well as … analyze the changing dynamics that a EUBS brings about. We find that a EUBS can provide risk sharing by stabilizing relative …-spending shocks. Yet, since this trade-off between allocative efficiency and consumption risk sharing does not exist after certain …

We study how background health risk affects financial risk-taking. We elicit financial risk-taking behavior of a … infections across time and space, we find that an increase in infections affecting background health risk translates into higher … financial risk-taking, and for the alleviating effect of self-insurance devices …

We measure the economic risk of epidemics at a geo-spatially detailed resolution. In addition to data about the …'s resilience (its ability of the recover rapidly from the shock). We find that the economic risk of epidemics is particularly high …

This paper studies the impact of financial sector size and leverage on the business cycle and risk-free rates dynamics …. We develop a general equilibrium model of a productive economy where financial intermediaries provide costly risk … mitigation to households by pooling the idiosyncratic risks of their investment activities. In contrast to previous studies, we …

choose their portfolio risk, bank size, and capital holdings. Banks voluntarily hold equity when the buffer effect against … the risk of default outweighs the cost advantages of debt financing. In the optimum, banks with lower monitoring costs are … to make higher-risk portfolios more attractive. Accounting for banks’ interior capital choices can thus explain why …

. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their … using financial markets and shareholders cannot perfectly monitor the manager's portfolio in order to keep him from hedging … the risk in his compensation. In particular, shareholders can monitor the manager's portfolio stochastically, and since …