regularities by developing a new firmbased trade model wherein managers are risk averse. Higher volatility induces the reallocation …

stance. When decomposing the VIX into two components, a proxy for risk aversion and expected stock market volatility … ("uncertainty"), we find that a lax monetary policy decreases both risk aversion and uncertainty, with the former effect being …

. We decompose the VIX into two components, a proxy for risk aversion and expected stock market volatility (“uncertainty … monetary policy decreases risk aversion after about five months. Monetary authorities react to periods of high uncertainty by … through which monetary policy may affect risk aversion, e.g., through its effects on broad liquidity measures and credit …