"... we find that the Bayesian approach outperforms the classical one in identifying whether a model is correctly specified which is the principal aim of any backtesting framework. The power of the methodology is due to its ability to test individual model parameters and hence identify which aspects of a model are misspecified as well as the degree of misspecification."
The paper delves into the intertwining of financial institutions and environmental concerns, particularly climate change and biodiversity loss. It introduces a dual framework based on 'impact' and 'ri
The paper explores optimal insurance contracts using decision makers' preferences, combining expected loss with a deviation measure like Gini coefficient or standard deviation. It reveals that using e
“I show that, during a normal economic period, rather than having a disciplining effect, disclosure leads to banks increasing risk taking, consistent with banks facing pressure to offset the costs of