Their work has shed important new light on “shadow insurance” risks from off-balance-sheet liabilities of life insurance companies.4 As well, my head of supervision, Ron Feldman, and his team are using option price data – again, as encoded in risk-neutral probabilities – as a source of information about tail risks for large financial institutions.5  2  See Narayana Kocherlakota, “Optimal Outlooks,” presentation at Conference on Extracting and Understanding the Risk Neutral Probability Density from Options Prices, New York University Stern School of Business, New York, N.Y., Sept. 20, 2013.
3  See Greg Kaplan and Sam Schulhofer-Wohl, “Interstate Migration Has Fallen Less Than You Think: Consequences of Hot Deck Imputation in the Current Population Survey,” Demography 49(3), 1061–74, August 2012; Greg Kaplan and Sam Schulhofer-Wohl, “Understanding the Long-Run Decline in Interstate Migration,” Federal Reserve Bank of Minneapolis Working Paper 697, revised December 2013.