Investment, uncertainty, and managerial risk aversion: Firm willingness, as opposed to ability, to take risks decreases when idiosyncratic firm risk increases. The negative effect of idiosyncratic risk on investment is larger for firms where the managers are paid in shares and smaller in firms where they are paid in options.
Income inequality in the US: US income inequality increases steadily from 1987 to 2009 and this increase is permanent. This implies that the rich are getting richer and the poor are getting poorer, and that social mobility decreases over time. The redistributive tax system reduces the level of inequality by 10 percent, but does not alleviate its increasing trend.
FOMC sentiment and economic forecasting: Textual analysis on FOMC documents can be used to extract factors that improve GDP forecasting.
Wealth heteroskedasticity of business risks: Wealthier entrepreneurs are more likely to experience substantial business-income risks, either positive or negative, compared to less wealthy entrepreneurs. For example, compared to entrepreneurs in the bottom half of the 2007 wealth distribution, entrepreneurs above the 90th (99th) percentile are 14 percent (25 percent) more likely to experience a large percentage change in business income. This evidence of wealth heteroskedasticity in business risks might be consistent with the idea that wealthier entrepreneurs are effectively less risk averse (either because of preferences or because of absence of borrowing constraints) and therefore take on more risks. It could also mean that entrepreneurs participate in business endeavors, which entail large negative shocks, in hopes of eventually experiencing large positive shocks.