role of secondary markets in providing opportunities for redistributing risk is made transparent and the modifications …

risk sharing. Higher uncertainty increases stock prices, risk premiums, volatility, wealth inequality and the dispersion of …I characterize a dynamic economy under general distributions of households' risk tolerance, endowments, and beliefs … consumption-share increases; (b) the wealth-share of high risk-tolerant households increases; (c) richer households' wealth …

This paper introduces a formal definition and an experimental measurement of the concept of cognitive uncertainty …: people's subjective uncertainty about what the optimal action is. This concept allows us to bring together and partially … explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice …

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 … variation in risk premia over time, are observationally equivalent to preference shocks. An increase in the perceived …

The paper illustrates how one may assess our comprehensive uncertainty about the various relations in the entire chain ….5 °C. The 99 percent confidence interval ranges from 3.0 °C to 6.9 °C. Uncertainty about socio-economic drivers of climate … change lie behind a non-trivial part of this uncertainty about global warming …

the present value of the flow of social benefits minus costs. But the real world is one of considerable uncertainty … discount rates that should be used to compute present values. The implications of uncertainty are complicated by the fact that … horizons. Correctly incorporating uncertainty in policy design is therefore one of the more interesting and important research …

range of specific outcomes, allowing us to measure uncertainty, assess its driving forces, and compare this measure of … uncertainty with the dispersion of point-estimates among individual forecasters (a measure of disagreement). We also assess the …. Finally we assess the role of risk, finding little evidence that risk-aversion drives a wedge between market prices and …

This paper discusses the nature of the uncertainty faced by central banks and considers three approaches to dealing … with uncertainty(1) formal optimization models and robust rules based on such models; (2) informal rules like the Taylor …

The theoretical relationship between investment and uncertainty is ambiguous. This paper briefly surveys the insights … theoretical effects. Our results from a panel of U.S. manufacturing firms indicate a negative effect of uncertainty on investment … of the marginal product of capital, and we find no evidence for the presence of a CAPM-based effect of risk …

equilibrium model with a fund offering the risk-adjusted market portfolio (RAMP), ambiguity averse investors hold the fund and an … optimal portfolio based on only one information source (price versus private signal). Asset risk premia satisfy the CAPM with …