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 …

question. In the model, individuals accumulate human capital and are exposed to the risk of losing some of their human capital …

In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices …