boom yields consistently positive excess returns. This excess return compensates for the risk of high negative returns in … countries on risk aversion, and low (high) risk aversion currencies depreciate (appreciate) in times of global turmoil …

We study the impact of a government spending shock on the distribution of income and wealth between cohorts in a …-of-thumb consumers. We demonstrate that an unexpected increase in government spending increases income inequality and decreases wealth …

. The pooling and tranching of credit assets relaxes both the funding and the risk constraints financial entities face … allowing them to increase balance sheet holdings. This increase in asset demand depresses the compensation for undertaking risk … in the economy, confirming our empirical results. Crucially, we show that declines in the compensation for risk taking in …

We analyse optimal saving of risk-averse households when labour income stochastically jumps between two states. The … generalized Keynes-Ramsey rule includes a precautionary savings term. A phase diagram analysis illustrates consumption and wealth …

We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We … independent of the social welfare function and determined by the degree of income risk and risk aversion. The optimal linear … provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is …