In this paper, we construct alternative theoretical models for exchange rates by introducing additional risk factors … macroeconomic sources of FOREX risk may be a missing factor in the exchange rate study. …

We examine asset prices in a representative-agent model of general equilibrium. Assuming only that individuals are risk … averse, we determine conditions on the changes in asset risk that are both necessary and sufficient for the asset price to … incomplete in the sense of containing an uninsurable background risk, such as a risk on labor income. We extend our model to show …

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 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 …

From 1963 through 2015, idiosyncratic risk (IR) is high when market risk (MR) is high. We show that the positive … has roots in fundamentals. Higher market risk predicts greater idiosyncratic earnings volatility as well as dispersion and …

We investigate financial experts’ beliefs about climate risk pricing and analyze how those beliefs influence stock …

discount rates for investments in climate change abatement that reduce aggregate risk, as in disasterrisk models, are bounded …

their individual risk aversion. They choose between a fundamentalist and a trend-following rule to form expectations about … the price of a risky asset. Given their risk aversion, agents make a deterministic trade-off between mean and variance … both in choosing a forecasting heuristic and determining the number of risky assets to buy. Heterogeneous risk preferences …