returns by aggregate investment and valuation ratios; and v) a downward sloping term structure of risk premia for dividend … firm characteristics - Tobin's Q, past investment, earnings-price ratios, market betas, and idiosyncratic volatility of … the firm's exposure to IST shocks and risk premia. Our calibrated model replicates: i) the predictability of returns by …

probability of disaster leads to a collapse of investment and a recession, an increase in risk spreads, and a decrease in the … shocks to aggregate uncertainty, I introduce a small, time-varying risk of economic disaster in a standard real business … risk of disaster does not affect the path of macroeconomic aggregates - a "separation theorem" between macroeconomic …

I study irreversible investment decisions when projects take time to complete, and are subject to two types of …, and materials that will ultimately be required to complete the project, and that is only resolved as the investment … required, and which is external to the firm's investment activity. I derive a simple decision rule that maximizes the firm …