process. As suggested here, doing so transforms policy formulation from an exercise in reverse engineering to one of risk …

can decelerate growth in the absence of any level shocks. In contrast to level risk, which is always welfare reducing for … a risk-averse household, volatility risk can increase or decrease welfare, depending on model parameters. When … calibrated to U.S. data, the model finds that the welfare cost of volatility risk is largely negligible under plausible model …

We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data …’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank …

This paper studies the use of information for incentives and risk sharing in agency problems. When the principal is … risk neutral or the outcome is contractible, risk sharing is unnecessary or completely taken care of by a contract on the … outcome is noncontractible, however, the principal has to rely on imperfect information for both incentives and risk sharing …

risk, the issuer of securitized assets may credibly signal its quality. However, in the boom stage of the business cycle …-quality assets are no longer traded. The model also suggests that improperly designed regulation requiring higher explicit risk …