- Date14 March 2023
- Time 14h00 - 15h30
- Room Auditorium 4
Résumé
We identify a shock that explains the bulk of fluctuations in equity risk premia, and show that the shock also explains a large fraction of the business-cycle comovements of output, consumption, employment, and investment. Recessions induced by the shock are associated with reallocation away from full-time permanent labor positions, towards part-time and flexible contract workers. A flexible-price model with labor market frictions and fluctuations in risk appetite can explain all of these facts, both qualitatively and quantitatively. The size of risk-driven fluctuations depends on the relationship between the riskiness and the marginal product of different stores of value: if safe savings vehicles have relatively low marginal products, then a flight to safety will drive a larger aggregate contraction.
Related document(s)
Other seminars
To be announced
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Seminar
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Macroeconomics Seminar
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Date 1 December 2026
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Place Auditorium 4
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Speaker or organiser Mishel Ghassibe (CREI, Barcelona)
Détails
Past
Interest Rate Surprises When the Fed Doesn't Speak
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Seminar
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Macroeconomics Seminar
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Date 3 November 2026
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Place Auditorium 4
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Speaker or organiser Silvia Miranda Aggripino (Oxford University)
Détails
Past
The EU Miracle: When 75 Million Reach High Income
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Seminar
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Macroeconomics Seminar
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Date 13 October 2026
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Place Auditorium 4
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Speaker or organiser Basile Grassi (Bocconi University)
Détails