Climate change has become one of the most prominent concerns globally. In this paper, we study the transition risk of … and output growth during the transition risk. With optimal carbon price designs, it should react even less to inflation …

idiosyncratic proxies for risk. Moreover, the model features endogenous balance sheet choices and a novel formulation of the … targeted leverage ratio, in which assets are risk-weighted by risk-sensitivity measures. The results highlighted in this paper …

Financial Crisis was associated with an increase in both risk aversion and ambiguity aversion, while the Dot-com Crisis only … affected risk aversion. …

We examine the impact of risk-based portfolio constraints on asset prices in an exchange economy. Constrained agents … scale down their portfolio and behave locally like power utility investors with risk aversion that depends on current market … conditions. The imposition of constraints dampens fundamental shocks, challenging studies that suggest that risk management rules …