an additional hedging motif driven by the interaction between real exchange rate risk and ambiguity aversion. What … matters is the long-run as opposed to the short-run risk. Domestic equity is a good hedge with respect to long-run real … exchange rate risk even when bonds are traded. The higher is the degree of ambiguity aversion, the stronger is the home bias …

since added another wrinkle, by pointing to the need to separate risk aversion from intertemporal substitution to calibrate …-Zin preferences to allow for the separate treatment of risk aversion and intertemporal substitution …

an additional hedging motif driven by the interaction between real exchange rate risk and ambiguity aversion. What … matters is the long-run as opposed to the short-run risk. Domestic equity is a good hedge with respect to long-run real … exchange rate risk even when bonds are traded. The higher is the degree of ambiguity aversion, the stronger is the home bias …

since added another wrinkle, by pointing to the need to separate risk aversion from intertemporal substitution to calibrate …

. Failure to allow for this possible input–output risk structure is indeed one of the limitations of the conventional form of … the CES production function. This limitation may result in false inferences about input-driven output risk. In light of … from very restrictive structural assumptions regarding risk considerations, and that such restrictions may lead to biased …