Since the deregulation of electricity markets in the 1990s, U.S. power grids have witnessed the creation of an increasingly diverse suite of financial instruments designed to mitigate risks caused by underlying generation and consumption patterns. However, the nature of risks is shifting rapidly...

Physical climate risks significantly influence banks' collateral practices. Drawing on comprehensive loan-level data from Sweden, we find that adverse weather events increase both the likelihood and the amount of collateral required for new loans. For existing loans, banks are less inclined to...

Directed acyclic graphs (DAGs) provide a transparent framework for encoding causal structures and identifying causal effects. This paper demonstrates how DAGs help specify local projections (LPs) for estimating causal impulse responses. Examples illustrate how graphical rules can be used to...

The essay delves into the impact of environmental uncertainty on asymmetric mispricing, utilizing the data from listed firms in China spanning from 2007 to 2023. Our analysis reveals that environmental uncertainty amplifies stock mispricing within capital markets, whether upward or downward....

Using world commodity prices as an instrument, this paper proposes a novel method for decomposing channels of international risk sharing for commodity-exporting countries. The method identifies the commodity “sector”' as the projection of gross national product growth on commodity-price...

Rapid urbanization in cities worldwide has led to significant environmental, social, and economic challenges. These include heightened exposure to extreme weather and climate events, increased air and water pollution, rising poverty levels, shrinking green spaces, and greater risks to lives,...

The aim of this report is, first, to inform about the current and projected changes to heat stress hazard and exposure as a result of climate change, particularly in urban areas; second, highlight the socioeconomic impacts of heat, including on human health, labor productivity, and mortality;...

The tax and transfer system partially insures households against individual income risk. We build a framework to assess the size and (welfare) value of this partial insurance, which is based on exploiting distributional differences between household gross income and disposable income. Our...

We study the ambiguity-adjusted return distribution induced by an investor with smooth ambiguity preferences 'a la Klibano! et al. (2005), who faces uncertainty about the variance of asset returns. The variance uncertainty is modeled using a gamma distribution, a second-order prior over the...

Workforce adjustments, such as mass layoffs, are significant corporate events that can influence stock returns and volatility, yet their broader asset-pricing implications remain underexplored. We examine the impact of such workforce shocks on stock performance from an asset-pricing perspective....

We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax...

We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax...

We use a novel data set containing all corporate loans throughout the Eurozone to document a series of novel stylized facts on the relationship between collateral and the probability of default. First, we show that the pervasive empirical finding that riskier borrowers pledge collateral is...

This paper examines the relevance of banks' exposure to climate transition risk in the interbank lending market. Using transaction-level data on repo agreements, we first establish that banks with higher exposure to transition risk face significantly higher borrowing costs. This premium is a...

We investigate the impact of structural shocks on the joint distribution of future real GDP growth and inflation in the euro area. We model the conditional mean of these variables, along with selected financial indicators, using a VAR and perform quantile regressions on the VAR residuals to...

The lithium battery energy storage system (ESS) faces problems such as market price fluctuation and uncertainty of frequency modulation (FM) signals when participating in power market. Day-ahead bidding behavior bears revenue risk and real-time bidding behavior needs to adjust. It is necessary...

Designing shared road spaces that accommodate multiple modes of transport is central to promoting active travel, but engagement can be hindered by perceptions of danger and unfairness, especially among groups more worried about navigating shared spaces. This study used an online randomised...

While the environmental consequences of geopolitical tensions have received growing academic attention, little is known about how these dynamics manifest in the Middle East and Africa (MEA)-a region both environmentally vulnerable and geopolitically fragile. Even less is understood about how...

Central clearing counterparties (CCPs) manage counterparty risk by requiring clearing members to post margins. This paper explores the role of margins as "canaries in the coal mine:" By inducing defaults of fragile counterparties before contract maturity, margin calls enable CCPs to transfer...

Safety and Security, risk and resilience represent important factors for a successful festival. The paper describes the role of safety and the challenges which are derived from it. The role and responsibilies of the different stakeholders are briefly described before discussing risk and its...

Great efforts in biotechnology are being made to reduce the use of fossil fuels and to drive a transition toward a bioeconomy. However, these early-stage technical concepts also carry sustainability risks at ecological, social and economic levels due to large-scale biomass flows when scaled to...

This Policy Brief examines economic experts' expectations about the macroeconomic effects of import tariffs and trade policy uncertainty, based on the 2025Q2 and 2025Q3 waves of the Economic Expert Survey (EES). The survey collected responses from over 600 economists across EU member states and...

The discussion around globalization often overlooks historical context and real-world dynamics, especially in the context of global development. This study examines the relationship between information and communication technology (ICT), geopolitical risks (GPR), and globalization in Pakistan...

This study investigates the asymmetric responses of AI and ESG Exchange Traded Funds (ETFs) to geopolitical and financial uncertainty, with a focus on resilience across market regimes. The NASDAQ-100 and MSCI ESG Leaders indices are used as proxies for thematic ETFs, and their dynamic...

This study examines volatility spillovers among climate-policy-relevant sectors in the Chinese stock market across both time and frequency domains. It further explores the impact of climate policy uncertainty on the risk spillover effect in the Chinese stock market and its underlying mechanisms....

This paper proposes a new framework for measuring systemic financial risk, which combines the Diebold and Yilmaz spillover index model, complex network, and dimensionality reduction method. This framework simulates the process of risk contagion through network dynamics, accounting for the...

This study examines the use of Filtered Historical Simulation (FHS) to estimate tail risk in cryptocurrency markets for the optimization of robustness in this area under model misspecification. An ARMA-GARCH model is employed on the daily returns on Binance Coin and Litecoin in order to compare...