Oxford Events, the new replacement for OxTalks, will launch on 16th March. The two-week OxTalks freeze period starts on Monday 2nd March. During this time, there will be no facility to publish or edit events. The existing OxTalks site will remain available to view during this period. Once Oxford Events launches, you will need a Halo login to submit events. Full details are available on the Staff Gateway.
We isolate the main driver of equity risk premium fluctuations in the data, and show that this same shock also explains a large fraction of the business-cycle comovements of output, consumption, employment, and investment. Recessions associated with this shock are characterized by a reallocation away from full-time labor positions, and towards part-time and flexible contract workers. We explain the data using a novel real model where fluctuations in risk appetite lead to a shift from riskier to safer factors of production. Since safer factors carry lower marginal products – a form of real risk premium – this “flight-to-safety” in production input demand precipitates a broad macroeconomic contraction.
