crisis. Within a partial investment model, two kinds of uncertainty are introduced: volatility and disaster risk. The article … important but often neglected element of micro- and macroeconomic theory. With the onset of the financial crisis in 2007 and the … investment decisions play with regard to business cycle fluctuations.<br><br>However, the inclusion of real option values in …

This book presents an up-to-date overview of the theory as well as the empirics of the relationship between investment … investment theory, professionals in the financial sector and students of macroeconomics and finance. Investment, Capital Market …, the authors discuss both traditional investment models with uncertainty and the more modern option based models. They …

macroeconomic risk, investors reduce direct investment and hold more bank deposits. This ‘flight to quality’ leaves banks flush with … liquidity. Inside banks, given lack of observability of effort, loan officers (or risk takers) are compensated based on the … in order to curb risk-taking incentives at banks, and conversely, follow an expansionary monetary policy in times of …

face substantial uninsurable entrepreneurial and investment risks. This paper constructs a heterogeneous-agent general … equilibrium model with uninsurable entrepreneurial risk and capital-market imperfections to explore the implications of … uninsurable entrepreneurial risk for wealth distribution and aggregate activity in an incomplete market economy. It is shown that …