In this paper we show that temperature is an aggregate risk factor that adversely affects economic growth. Our argument … temperature (i.e., temperature betas) contains sharp information about the cross-country risk premium; countries closer to the … Equator carry a positive temperature risk premium which decreases as one moves farther away from the Equator. The differences …

a key determinant of risk premia at all investment horizons. As the investment horizon increases, transitory risks …

dividends next period as ambiguous. We calibrate the agent's ambiguity aversion to match only the first moment of the risk …

distribution (i.e., risk). It also mitigates the uncertainty about the true distribution of the fundamentals. Agents who lack …