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 … cycle fluctuations, while providing households with a risk-free asset whose real return is pro-cyclical and possibly …

first-order approximated solution built by perturbation methods accounts for risk. We show that risk matters economically in … a real business cycle (RBC) model with habit formation and capital adjustment costs and that neglecting risk leads to …

intergenerational inequality aversion and for risk aversion. If growth increases (reduces) intra-generational inequality, the SDR is …

We develop a financial-economic model for carbon pricing with an explicit representation of decision making under risk … specifications. We show that risk associated with high damages in the long term leads to stringent mitigation of carbon dioxide … emissions in the near term. Our results provide insight into how a systematic incorporation of climate-related risk influences …

asset prices and corporate default risk. Our model includes two empirically grounded nominal frictions: fixed nominal …

Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that … carbon risk affects firms’ credit spread. The effect is larger for European than North American firms and varies … to carbon risk when market-wide concern about climate change risk is elevated. Finally, lenders expect that adjustments …

. Uncertainty about the future rate of growth of the economy and emissions and the risk of macroeconomic disasters (tail risks) also …