vulnerability, drawing lessons from a detailed comparison of the response of Chile and Australia to recent external shocks and from … useful to identify and then distinguish between two inter-related dimensions of investors' confidence: country-trust and … to improve along these two dimensions of investors' confidence in the medium run, and policies to reduce the impact of …

confidence shock. Lack-of-confidence shocks play a central role in generating jobless recoveries, for fundamental shocks, such as …

, as well as in South Korea and China--two countries on different sides of the trilemma triangle of international finance …. We document that global financial shocks in both China and South Korea explain a substantial share of equity return … than 10 percent in Korea and negligible in the case of China). We also find that the combination of a closer capital …

). Ambiguity aversion is described by recursive multiple priors preferences that capture agents' lack of confidence in probability … using first-order approximations. In our estimated medium-scale DSGE model, a loss of confidence about productivity works … like 'unrealized' bad news. Time-varying confidence emerges as a major source of business cycle fluctuations …

There seems to be a widespread belief among economists, policy-makers, and members of the media that the "confidence … augmented to include empirical measures of consumer or business confidence. We also estimate non-linear VAR specifications to … allow for differential impacts of government spending in "normal'' times versus recessions. In normal times confidence does …

reducing consumer confidence and consumer demand? Is there also a supply-side channel through a tightened liquidity constraint … consumer confidence, based on its response to the 9/11 shock in 2001. We then construct a separate firm-level index on … important than reduced consumer confidence or spending in explaining cross-firm differences in stock price declines …

We revisit the question of why shifts in aggregate demand drive business cycles. Our theory combines intertemporal … supply to respond to shifts in aggregate demand without nominal rigidity. The second introduces a "confidence multiplier …