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Cited by 855

The DOI matches its Crossref record; 43 of the 43 references it cites were found in a registry or an index.

Rare Disasters, Asset Prices, and Welfare Costs

Barro, Robert J·2009·American Economic Review
DOI 10.1257/aer.99.1.243
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Abstract

A representative-consumer model with Epstein-Zin-Weil preferences and i.i.d. shocks, including rare disasters, accords with observed equity premia and risk-free rates if the coefficient of relative risk aversion equals 3–4. If the intertemporal elasticity of substitution exceeds one, an increase in uncertainty lowers the price-dividend ratio for equity, and a rise in the expected growth rate raises this ratio. Calibrations indicate that society would willingly reduce GDP by around 20 percent each year to eliminate rare disasters. The welfare cost from usual economic fluctuations is much smaller, though still important, corresponding to lowering GDP by about 1.5 percent each year. (JEL E13, E21, E22, E32)

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Metadata

Authors
Barro, R. J.
Venue
American Economic Review
Publisher
American Economic Association
Published
2009-02-01
Volume
99
Issue
1
Pages
243-264
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/aer.99.1.243
OpenAlex
W3124731170
Cited by
855
References
43
FWCI
102.81
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Rare Disasters, Asset Prices, and Welfare Costs. https://app.cochat.ai/papers/10.1257/aer.99.1.243
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Barro, R. J. (2009). Rare Disasters, Asset Prices, and Welfare Costs. American Economic Review. https://doi.org/10.1257/aer.99.1.243

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.