This paper presents an innovative approach to financial market modelling by integrating fuzzy discount factors into the decision-making process, thereby reflecting the complexities of human behaviour. Traditional financial models often fail to account for market dynamics' psychological factors....

Dynamic consistency is crucial for credible evaluation of intergenerational choice plans that inherently lack commitment. We offer a general characterization for dynamically consistent intergenerational welfare aggregation. The aggregation is characterized by envy-guilt asymmetry in discounting...

The evidence suggests that monetary policy transmission is asymmetric over the business cycle. Interacting financing frictions with a preference for liquidity provides an explanation for this fact. Our mechanism generates monetary asymmetries in a model that jointly reproduces a set of asset...

This paper explores the implications of consumption heterogeneity between domestic and foreign investors on the cross-section of stock returns in a host country. We argue that foreign investors in a small open economy integrated into global financial markets may face consumption risk, which...