I analyze whether or not market-wide investor sentiment induces stock mispricing, by affecting the boldness of predictions of firms' long-term earnings growth. I predict that bullish market-wide sentiment induces investors to aggressively separate firms with high growth futures from others, and...

A large literature is concerned with measuring economic uncertainty and quantifying its impact on real decisions, such as investment, hiring, and R&D, and ultimately economic growth. The COVID-19 pandemic underscores the importance of timely measures of uncertainty and expected growth across...

We develop two new methods for calibrating subjective expectations regarding the return generating process (RGP) of financial assets without resorting to noisy realized returns. Using finance professionals' expectations of average and extreme returns, volatilities, and probabilities of stocks...

The recently developed long-run risks asset pricing model shows that concerns about long-run expected growth and time-varying uncertainty (i.e., volatility) about future economic prospects drive asset prices. These two channels of economic risks can account for the risk premia and asset price...