Tag: prospect theory

To understand financial market dynamics, it is helpful to distinguish beliefs, attitudes towards risk, and attitudes towards ambiguity. Beliefs are subjective evaluations of future...

A new Fed paper explains how to construct a real-time distress index, using the case of the corporate bond market. The index is based...

The financial stability interest rate is a threshold above which the real interest rate in an economy triggers financial constraints and systemic instability. It...