Many sophisticated investors rely on scenario analysis to select a portfolio. These investors define prospective economic scenarios, assign probabilities to them, translate the scenarios into expected asset class returns, and select the portfolio with the highest expected return or expected...

How do microeconomic frictions and microeconomic heterogeneity affect macroeconomic dynamics? We revisit the recent claim in the literature that nonconvex capital adjustment costs do not matter for aggregate dynamics. We argue that the neutrality of fixed adjustment frictions in general...

We formalise and present an innovative general approach for developing complex system models from survey data by applying Bayesian Networks. The challenges and approaches to converting survey data into usable probability forms are explained and a general approach for integrating expert knowledge...