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This paper develops and applies a simple graphical approach to portfolio selection that accounts for covariance between asset returns and an investor's labor income. Our graphical approach easily handles income shocks that are partly hedgable, multiple risky assets, many periods and life cycle considerations. We apply the approach to occupation-level(More)
CO(2) emissions from the burning of fossil fuels are the primary cause of global warming. Much attention has been focused on the CO(2) directly emitted by each country, but relatively little attention has been paid to the amount of emissions associated with the consumption of goods and services in each country. Consumption-based accounting of CO(2)(More)
Slowing climate change requires overcoming inertia in political, technological, and geophysical systems. Of these, only geophysical warming commitment has been quantified. We estimated the commitment to future emissions and warming represented by existing carbon dioxide-emitting devices. We calculated cumulative future emissions of 496 (282 to 701 in lower-(More)
This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in the paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions(More)
We characterize the covariance structure between asset returns and labor income shocks for synthetic persons defined in terms of sex, education and birth cohort. The correlation of income shocks with both aggregate and own-industry equity returns tends to rise with educational attainment and, surprisingly, is negative for several sex-education groups. We(More)