There has been a growing consensus among academics, analysts, and policymakers that the official federal budget estimates should reflect the “cost of risk” — the amount that the private market would demand to bear risk. The result would be to add tens if not hundreds of billions of dollars...

This paper presents an analysis of the uncertainty in projections of the federal budget balance arising due to uncertainty in economic, and government revenue and spending projections. Budget projections frequently differ from actual results due to an unavoidable level of uncertainty contained...

This paper presents a tractable model of a firm that chooses both the scale and timing of its investment. The value-maximizing investment policy is lumpy, and sensitivity analysis shows that greater demand volatility is associated with the firm choosing to invest in larger increments, less...