Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
967416 | Journal of Monetary Economics | 2015 | 22 Pages |
Abstract
We inject aggregate uncertainty - risk and ambiguity - into an otherwise standard business cycle model and describe its consequences. We find that increases in uncertainty generally reduce consumption, but they do not account, in this model, for either the magnitude or the persistence of the most recent recession. We speculate about extensions that might do better along one or both dimensions.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
David Backus, Axelle Ferriere, Stanley Zin,