adjusting for risk. The traditional actuarial approach - the approach currently used by the Social Security Administration in … generating its most widely cited numbers - ignores risk and instead simply discounts "expected" future flows back to the present … using a risk-free rate. If benefits are risky and this risk is priced by the market, then actuarial estimates will differ …

itself. It then examines whether aggregate market risk or aggregate fundamental risk is priced. Although market risk is … priced, the paper does find that fundamental risk is an important factor in explaining risk premia …

We demonstrate, using data for the period 1954-2003, that differences in exposure to consumption risk explains cross … calendar year return when computing the latter's exposure to consumption risk. We find strong support for our consumption risk …

This paper analyzes the implications of alterative risk assumptions for estimates of the distorting effects of the … risk assumptions. Results indicate that assessments of the relative importance of these distortions are sensitive to … alterative risk assumptions used in marginal tax rate calculations. The paper also explores the sensitivity of results to key …