myopic politicians face political risk and prefer to extract political rents as early as possible. An implication of this …

a simple extension of the long-run risk model …

economy tends to damage risk sharing when the composition of collateral is biased toward private assets. As we show that a … stable economy is more propitious to the creation of private collateral, stability makes risk sharing increasingly fragile to … risk sharing to aggregate volatility as predicted by our model …

overconfident about the signal. We find that, because overconfident traders introduce an additional source of risk, rational … bonds are an essential accompaniment of equity investment, as they serve to hedge this "sentiment risk." …

account for the risk premia and asset price fluctuations. In addition, the model can empirically account for the cross …

, analyze, and manage macroeconomic risk based on the theory and practice of modern contingent claims analysis (CCA). We … illustrate how to use the CCA approach to model and measure sectoral and national risk exposures, and analyze policies to offset … their potentially harmful effects. This new framework provides economic balance sheets for inter-linked sectors and a risk …

and to examine two potential explanations of the asymmetry: leverage effects and time-varying risk premiums. Our empirical …

continue to hold even if the coefficient of relative risk aversion approaches zero (that is, even if the marginal utility of … income is constant so that agents are risk neutral in the conventional sense) …