This paper examines the role of uncertainty shocks in a one-sector, representative-agent dynamic stochastic general … equilibrium model. When prices are flexible, uncertainty shocks are not capable of producing business cycle comovements among key … macro variables. With countercyclical markups through sticky prices, however, uncertainty shocks can generate fluctuations …

uncertainty, much of which concerns the nation's fiscal policy. Intuition suggests that increased policy uncertainty likely has … of shocks due to policy uncertainty. This study uses industry data to explore whether policy uncertainty indeed affects … that can ultimately be attributed to federal government expenditures. The estimation results reveal that policy uncertainty …

sanctions-and-rewards mechanism, it is important to consider individual attitudes toward risk and uncertainty. …