This paper analyzes the role of stochastic uncertainty in a multi-sector housing model with financial frictions. We include time varying uncertainty (i.e. risk shocks) in the technology shocks that affect housing production and provide estimates of the time-series properties of risk shocks by...

This paper introduces a new algorithm, the recursive upwind Gauss-Seidel method, and applies it to solve a standard stochastic growth model in which the technology shocks exhibit heteroskedasticity. This method exploits the fact that the equations defining equilibrium can be viewed as a set of...