frictions render labor-market risk countercyclical and endogenous to monetary policy. Our main result is that a majority of …

OECD countries 1992-2007. We focus on risk sharing through savings, factor income flows, and capital gains. Risk sharing … through factor income and capital gains was close to zero before 1999 but has increased since then. Risk sharing from capital … gains, at about 6 percent, is higher than risk sharing from factor income flows for European Union countries and OECD …

-cycle framework how individuals respond to recessions. Our focus is on the sharp increase in savings rates that have been observed in … negative shock to individual income; (ii) an increase in the variance of idiosyncratic permanent shocks; (iii) a tightening of … times. We show that the rise in the aggregate savings ratio is driven by increases in uncertainty, rather than tightening of …