The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
The Outreach and Education function engages, empowers and educates the Second District communities that the Bank serves, especially civic leaders, students, educators, small business owners, policymakers and the general public. It furthers the Bank's commitment to the region by listening to the communities we serve and leveraging our unique attributes to positively impact school and university programs, as well as analysis and research.
We model an “anxious” agent as one who is more risk averse with respect to imminent risks than distant risks. Such horizon-dependent risk aversion preferences describe well-documented features of (i) individual behavior, (ii) equilibrium asset prices, and (iii) endogenously arising institutions. In particular, based on a utility function that captures individual subjects’ behavior in the lab, we predict a downward-sloping term structure of risk premia, and show that costly delegated portfolio management is a strategy to cope with dynamic inconsistency with respect to intra-temporal risk-return trade-offs.