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 …

variables. We model economics as ensemble of agents on economic space and agent's risk ratings play role of their coordinates …-like equations define fluctuations of aggregate variables. Repeated motion of agents from low risk to high risk area and back define … risk, mean square risk and higher statistical moments. Fluctuations of statistical moments describe phases of financial and …