9320831 Shiller The purpose of this project is to provide better measures of major economic risk factors (components of economic or wealth fluctuations that affect many people) to facilitate the creation of new insurance and hedging markets for these risks. The biggest economic risks today are not represented in any liquid financial markets. There are no market for claims on national incomes or an any other large income aggregates. There is no large liquid market for real estate. An important reason why there are not liquid markets for such risks is that there are no agreed-upon objective measures of the shocks that represent such risks. This research will focus on developing indices of incomes or rents or prices of claims on them that are specifically designed to be the basis of cash settlement of innovative risk- management contracts, such as futures contracts. In addition, data will be collected and assembled on the behavioral foundations of speculative market behavior: including continuing time-series data collection on expectations and theories among U.S. and Japanese stock market participants. ***
