We consider an optimal consumption and pollution problem that has two important features. Environmental damages due to … perpetual decrease in environmental quality and consumption, both asymptotically converging toward zero. Therefore, accounting … for the risk of irreversibility induces more conservative decisions regarding consumption and polluting emissions. In …

equilibrium level. In contrast to the permanent income hypothesis, real consumption jumps part of the way to its new long …

"To measure the wealth-consumption ratio, we estimate an exponentially affine model of the stochastic discount factor … US consumption. Our estimates indicate that total wealth is much safer than stock market wealth. The consumption risk … wealth-consumption ratio is much higher than the price-dividend ratio on stocks throughout the post-war period. The high …