Fernández-Villaverde, Jesús; Guerrón-Quintana, Pablo A. - 2022
We review the literature on uncertainty shocks and business cycle research. First, we motivate the study of uncertainty … mechanisms that researchers have postulated to link uncertainty shocks and business cycles. Third, we outline how we can specify … uncertainty shocks. Fourth, we postulate a real business cycle model augmented with financial frictions and uncertainty shocks …