This paper examines the risk aspects of a fully phased-in investment-based defined contribution Social Security plan … system. A higher saving rate provides a cushion' that reduces the risk of unacceptably low benefits. For example, saving 6 … annuity exceeds 92 percent of the benchmark benefit. We also study a modified plan in which retirees face no risk of …

implications for the allocation of risk between generations. There is no reason to presume that the market or the family can … allocate risk efficiently to future generations, implying that stochastic government policies have the potential to create …

. After a negative macroeconomic shock, relatively risk tolerant investors sell risky assets while more risk averse investors … risk after a negative macroeconomic shock and lower exposure after a positive shock …This paper develops an overlapping generations model of optimal rebalancing where agents differ in age and risk …

The theoretical literature presumes generational risk is large enough to merit study and that such risk can be … to directly measure generational risk and the extent to which it can be mitigated via financial markets or Social … Security. The model is trend stationary as is common in the literature. It features isoelastic preferences, moderate risk …

Assessing the importance of uninsurable wage risk for individual financial choices faces two challenges. First, the … identification of the marginal effect requires a measure of at least one component of risk that cannot be diversified or avoided …. Moreover, measures of uninsurable wage risk must vary over time to eliminate unobserved heterogeneity. Second, evaluating the …

a simple extension of the long-run risk model …

without any self-correcting force to full employment. The trigger for the slump is a deleveraging shock, which creates an …