Tehran Institute for Advanced Studies (TeIAS)

/ Risk to Human Capital __ Mehran Ebrahimian


Risk to Human Capital

December 18, 2019


Khatam University, Building No2.
Address: Mollasadra Blvd., North Shirazi St., East Daneshvar St., No.17. See location on Google map


Mehran Ebrahimian

PhD candidate in Finance at the Wharton School of Business University of Pennsylvania


Existence of large left-tail shocks in the economy is crucial for the existence of equity premium and the observed equity volatility. While such shocks have occurred in the past, their cause, and hence their future distribution (along with their ability to explain the equity premium) remains a matter of debate. We present an asset pricing model with incomplete markets stemming from inalienable human capital. We show that inalienable human capital amplifies aggregate risk, leading to economic disasters that result in higher equity premia and higher volatility, as well as inefficient investment and negative distributional consequences.


Mehran Ebrahimian is currently a PhD candidate in finance at the Wharton School of Business in University of Pennsylvania. He holds a B.Sc. in physics and a M.Sc. in economics from Sharif University of Technology. His research focuses on the implications of financing frictions in macroeconomics and specifically the role of finance in income and social inequalities.