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Growth and Risk : A View from International Trade

Krishna, Pravin; Levchenko, Andrei A.; Ma, Lin; … - National Bureau of Economic Research - 2023

This paper studies the cross-country patterns of risky innovation and growth through the lens of international trade. We use a simple theoretical framework of risky quality upgrading by firms under varying levels of financial development to derive two predictions. First, the mean rate of quality...

Persistent link: https://www.econbiz.de/10014226112

Discounting Dollars, Discounting Lives : Intergenerational Distributive Justice and Efficiency

Kaplow, Louis - 2006

distributive justice and efficiency, the choice of interest rate for discounting dollars, and how the present approach relates to …

Persistent link: https://www.econbiz.de/10012466429

Why is Long-Horizon Equity Less Risky? A Duration-Based Explanation of the Value Premium

Lettau, Martin - 2005

This paper proposes a dynamic risk-based model that captures the high expected returns on value stocks relative to growth stocks, and the failure of the capital asset pricing model to explain these expected returns. To model the difference between value and growth stocks, we introduce a...

Persistent link: https://www.econbiz.de/10012467541

Rare Disasters, Tail-Hedged Investments, and Risk-Adjusted Discount Rates

Weitzman, Martin L. - 2012

to the riskfree rate alone. Some simple numerical examples are given. Implications are noted for discounting long …

Persistent link: https://www.econbiz.de/10012460164

Market Valuation of Accrued Social Security Benefits

Geanakoplos, John - 2009

One measure of the health of the Social Security system is the difference between the market value of the trust fund and the present value of benefits accrued to date. How should present values be computed for this calculation in light of future uncertainties? We think it is important to use...

Persistent link: https://www.econbiz.de/10012463479

Cash-Flow Risk, Discount Risk, and the Value Premium

Santos, Tano - 2005

A habit persistence, general equilibrium model with multiple assets matches both the time series properties of the market portfolio and the cross-sectional predictability of returns on price sorted portfolios, the value premium. Consistent with empirical evidence, the model shows that (a) value...

Persistent link: https://www.econbiz.de/10012466855

Discounting Rules for Risky Assets

Myers, Stewart C. - 1987

This paper develops a rule for calculating a discount rate to value risky projects. The rule assumes that asset risk can be measured by a single index (e.g., beta), but makes no other assumptions about specific forms of the asset pricing model. It treats all projects as combinations of two...

Persistent link: https://www.econbiz.de/10012476850

Intergenerational Transfers, Aging, and Uncertainty

Weil, David N. - 1993

Research on intergenerational transmission of wealth has pointed to uncertainty -- about the date of one's own death … uncertainty on the behavior of those who expect to receive bequests. Potential heirs who are prudent will consume less than would … bequests are received. I examine the effect of this uncertainty on the outcome of population aging. Population aging, by …

Persistent link: https://www.econbiz.de/10012474469

Social Security and Institutions for Intergenerational, Intragenerational, and International Risk Sharing

Shiller, Robert J. - 1998

Social security system old age insurance systems are devices for the sharing of income risks of elderly people with others. Risks can be shared intergenerationally (with the young of the same country), intragenerationally (with other elderly of the same country), or internationally (with...

Persistent link: https://www.econbiz.de/10012472169

Intergenerational Risk Sharing

Gordon, Roger H. - 1985

In this paper, we argue that in designing government debt and tax-transfer policies, it is important to consider their 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,...

Persistent link: https://www.econbiz.de/10012477349