This paper is a revised version of: "http://ssrn.com/abstract=2643293" http://ssrn.com/abstract=2643293.A revised version of this paper can be found at: "http://ssrn.com/abstract=3307622" http://ssrn.com/abstract=3307622.The paper derives the optimal carbon tax in closed-form from an integrated...

A revised version of this paper can be found at: 'http://ssrn.com/abstract=2667972' http://ssrn.com/abstract=2667972The paper derives the optimal carbon tax in closed-form from an integrated assessment of climate change. The formula shows how carbon, temperature, and economic dynamics quantify...

This paper studies attention allocation behavior of rationally inattentive consumers who have CRRA preferences, face uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to capital income risk, we solve for the optimal...

Uncertainty is a complex and “multilayered” object of multidisciplinary research. However, such concepts as “fundamental uncertainty”, “ambiguity”, “probability” and “risk” are common and universal. For a long time in economic theory, the problem of uncertainty remained, as...

This paper studies attention allocation behavior of rationally inattentive consumers who have CRRA preferences, face uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to capital income risk, we solve for the optimal...

If agents in workhorse business cycle models with financial frictions are allowed to index contracts to observable aggregates, they share aggregate financial risk (almost) perfectly. Thus, the borrowing-constrained capital holders' wealth share does not collapse following adverse shocks and the...

Uncertainties as to future supply costs of nonrenewable natural resources, such as oil and gas, raise the issue of the choice of supply sources. In a perfectly deterministic world, an efficient use of multiple sources of supply requires that any given market exhausts the supply it can draw from...

Findings are reported from two field studies that measured the evolution of coastal residents’ risk perceptions and preparation plans as two hurricanes — Isaac and Sandy — were approaching the United States coast during the 2012 hurricane season. The data suggest that residents threatened...

In RBC models, “disaster risk shocks” reproduce countercyclical risk premia but generate an increase in consumption along the recession and asset price fall, through their effects on agents' preferences (Gourio, 2012). This paper offers a solution to this puzzle by developing a New Keynesian...

This paper empirically examines the behavioral precautionary saving hypothesis by Koszegi and Rabin (2009) stating that uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also consider the internal margin, i.e., the strength, of loss...