At the zero lower bound, the central bank's inability to offset shocks endogenously generates volatility. In this …-contingent optimal monetary and fiscal policies can attenuate this endogenous volatility by stabilizing the distribution of future … outcomes. Fluctuations in uncertainty and the zero lower bound help our model match the unconditional and stochastic volatility …

role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and …

coincided with increased output volatility …

Is monetary policy less effective at increasing real output during periods of high volatility than during normal times …? In this paper, I argue that greater volatility leads to an increase in aggregate price flexibility so that nominal … stimulus mostly generates inflation rather than output growth. To do this, I construct price-setting models with "volatility …

This paper compares the role of stochastic volatility versus changes in monetary policy rules in accounting for the … time-varying volatility of U.S. aggregate data. Of special interest to us is understanding the sources of the great … build a medium-scale dynamic stochastic general equilibrium (DSGE) model with both stochastic volatility and parameter …

-order effect on their dynamics. The data favors a model with two unspanned volatility factors that capture uncertainty about …

This study exploits the October 2008 economic crisis in Iceland to identify the effects of a macroeconomic downturn on …