In this paper we study the importance of marriage for interstate risk sharing. We find that US states in which married couples account for a higher share of the population are less exposed to state-specific output shocks. Thus, marriages do not just improve the allocation of risk at the...

This paper shows that job mobility is a valuable channel which employed workers use to mitigate bad labor market shocks. I construct and estimate a model of wage dynamics jointly with a dynamic model of job mobility. The key feature of the model is the specification of wage shocks at the worker-...

This paper argues that shocks increasing macroeconomic uncertainty negatively affect economic activity not only in the short but also in the long run. In a sticky-price DSGE model with endogenous growth through investment in R&D, uncertainty shocks lead to a short-term fall in demand because of...

We investigate the macroeconomic effects of political risk in an information-rich SVAR. Using an external instrument based on an index of US partisan conflict for identification, we find that reduced political risk has expansionary impact: it is immediately priced into stock prices; increases...

Large risk shocks give rise to cost-push effects in the canonical New Keynesian model. At the same time, monetary policy becomes less effective. Therefore, stochastic volatility introduces occasional trade-offs for monetary policy between inflation and output gap stabilisation. The cost-push...

This paper uses a data-rich environment to produce direct econometric estimates of macroeconomic and financial uncertainty in the United Kingdom for the period 1991-2016. These indices exhibit significant independent variation from popular proxies for macroeconomic and financial uncertainty. We...