Working Paper: CEPR ID: DP18026
Authors: Viral Acharya; Timothy Johnson; Suresh Sundaresan; Steven Zheng
Abstract: No abstract available
Keywords: rare disasters; parameter uncertainty; mitigation; welfare costs; overreaction
JEL Codes: D6; D8; E21; E32; G10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| parameter uncertainty (C51) | economic behavior (D22) |
| uncertainty about duration (C41) | intensified responses from agents (L85) |
| uncertainty about duration (C41) | amplification mechanism (C59) |
| parameter uncertainty (C51) | extreme welfare costs (D69) |
| uncertainty about arrival rate (D89) | less investment in mitigation and insurance (H84) |
| removing parameter uncertainty (C29) | welfare gain (D69) |