Welfare Costs, Long Run Consumption Risk, and a Production Economy.

The main goal of this paper is to measure the welfare costs of business cycles in a production economy in which the representative agent has low risk aversion and - at the same time - the equity premium and the co-movements of aggregate quantities and market returns are comparable to what observed in historical data. In order to do so, I consider a production economy in which the representative agent has Epstein-Zin-Weil(1989) preferences, productivity has a Long Run Risk component and there are capital adjustment costs. In this way, I try to bridge the gap between the current Long Run Risk asset pricing literature, in which quantities are taken as exogenous, and the standard macroeconomic business cycle models. Preliminary results from a benchmark exchange economy suggest that when there is a Long Run Consumption Risk and the representative agent prefers early resolution of uncertainty, the implied total welfare costs of the consumption uncertainty range from 12\% to 20\%. (JEL classification: E20, E32, G12, D81)Production Economy, Long-Run Risk, Asset Pricing,

Investor Information, Long-Run Risk, and the Term Structure of Equity

We study the role of information in asset pricing models with long-run cash flow risk. When investors can distinguish short- from long-run consumption risks (full information), the model generates a sizable equity risk premium only if the equity term structure slopes up, contrary to the data. In general, the short- and long-run components are unidentified. We propose a sparsity-based bounded rationality model of long-run risk that is both parsimonious and fully identified from historical data. In contrast to full information, the model generates a sizable market risk premium simultaneously with a downward sloping equity term structure, as in the data.

Investor Information, Long-Run Risk, and the Duration of Risky Cash Flows

We study the role of information in asset pricing models with long-run cash ow risk. To illustrate the importance of the information structure, we show how the implications of the long run risk paradigm for the cross-sectional properties of stock returns and cash flow duration are affected by information. When investors can fully distinguish short and long-run consumption risk components of dividend growth innovations (full information), only exposure to long-run consumption risk generates significant risk premia, implying that high return value stocks are long-duration assets, contrary to the historical data. By contrast,when investors observe the change in consumption and dividends each period but not the individual components of that change (limited information), exposure to short-run risk can generate large risk premia, so that high-return value stocks are short-duration assets while low-return growth stocks are long-duration assets, as in the data. We also show that, in order to explain empirical finding that long-horizon equity is less risky than short-horizon equity, the properties of the cash ow model and the values of primitive preference parameters must be quite different from those emphasized in the existing long-run risk literature

The Market Price of Fiscal Uncertainty

Recent fiscal interventions have raised concerns about US public debt, future distortionary tax pressure, and long-run growth potential. We explore the long-run implications of public financing policies aimed at short-run stabilization when: (i) agents are sensitive to model uncertainty, as in Hansen and Sargent (2007), and (ii) growth is endogenous, as in Romer (1990). We find that countercyclical deficit policies promoting short-run stabilization reduce the price of model uncertainty at the cost of significantly increasing the amount of long-run risk. Ultimately these tax policies depress innovation and long-run growth and may produce welfare losses

Risks for the Long Run and the Real Exchange Rate

We propose an equilibrium model that can explain a wide range of international finance puzzles, including the high correlation of international stock markets despite the lack of correlation of fundamentals. We conduct an empirical analysis of our model, which combines cross-country-correlated long-run risk with Epstein and Zin (1989) preferences, using US and UK data and show that it successfully reconciles international prices and quantities, thereby solving the international equity premium puzzle. These results provide evidence suggesting a link between common long-run growth perspectives and exchange rate movements

The habitus and the critique of the present. A Wittgensteinian reading of Bourdieu’s social theory

I tackle some major criticisms addressed to Pierre Bourdieu’s notion of habitus by foregrounding its affinities with Ludwig Wittgenstein’s notion of rule-following. To this end, I first clarify the character of the habitus as a theoretical device, and then elucidate what features of Wittgenstein’s analysis Bourdieu found of interest from a methodological viewpoint. To vindicate this reading, I contend that Wittgenstein’s discussion of rule-following was meant to unearth the internal connection between rules and the performative activities whereby rules are brought into life. By portraying rules as tools that allow agents to stabilize and renegotiate practices, I illustrate the active role social agents play in the production of shared accounts of practices. I conclude by showing that, if viewed through this prism, the habitus proves to be meant to provide guidance on how social theory helps historicize and denaturalize the social world

Search for a vector-like quark T′ → tH via the diphoton decay mode of the Higgs boson in proton-proton collisions at s \sqrt{s} = 13 TeV

A search for the electroweak production of a vector-like quark T′, decaying to a top quark and a Higgs boson is presented. The search is based on a sample of proton-proton collision events recorded at the LHC at = 13 TeV, corresponding to an integrated luminosity of 138 fb−1. This is the first T′ search that exploits the Higgs boson decay to a pair of photons. For narrow isospin singlet T′ states with masses up to 1.1 TeV, the excellent diphoton invariant mass resolution of 1–2% results in an increased sensitivity compared to previous searches based on the same production mechanism. The electroweak production of a T′ quark with mass up to 960 GeV is excluded at 95% confidence level, assuming a coupling strength κT = 0.25 and a relative decay width Γ/MT′ < 5%