investment; the impact of uncertainty on investment occurs primarily through changes in credit spreads; and innovations in credit … spreads have a strong effect on investment, irrespective of the level of uncertainty. These findings raise a question … financial shocks. By influencing the effective supply of credit, both types of shocks exert a powerful effect on investment and …

repay their loans when investment productivity turns out to be low ex post. We characterize market equilibrium, the …

This paper proposes a simple homogeneous dynamic model of investment and corporate risk management for a financially … investment and financing decisions. In our model, corporate risk management involves internal liquidity management, financial … constrained firm. Following Froot, Scharfstein, and Stein (1993), we define a corporation's risk management as the coordination of …

. When the agent can trade the market portfolio to partially hedge against investment risk, the systematic volatility is … investment payoff is a series of flows, the agent's idiosyncratic risk exposure alters both the implied option value and the …, consumption/savings, and portfolio selection. For a lump-sum investment payoff and an agent with a sufficiently strong …

We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a … idiosyncratic and systematic risk lead developers to delay new real estate investments. Empirically, a one-standard deviation … increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in …

the idea that different individuals would rationally prefer different investment strategies and risk reduction options … specified in current law. Calculations of expected utility show that these risk reduction techniques can raise expected utility … relative to the plans with no guarantees. The ability to do so depends on the individual's risk aversion level. This underlines …

probability distributions. This paper also explores the theoretical foundations of risk ranking, including proving a key …

This paper examines the risk aspects of an investment-based defined contribution Social Security plan. We focus on the … investment risk can be reduced further by using a mixed system that combines pay-as-you-go and investment-based components or … risk after the plan is fully phased in. Individuals deposit a fraction of wages to a Personal Retirement Account (PRA …

We develop and analyze a model of a multi-stage investment project that captures many features of R&D ventures and … investment by the firm. In addition, the risks associated with the ultimate cash flows the firm realizes on completion of the … sources of risk, and allows us to study their interaction in determining the risk premia earned by the venture during …

techniques from the theory of multiple risk-bearing. Applying this analysis, the effect of labor income taxes on the demand for …The effect of uninsured labor income risk on the joint saving/portfolio composition decision is analyzed using new …