shock in the data causes significant declines in output, consumption, investment, and hours worked. Standard general … usual stabilizing function because of the zero lower bound. We calibrate our uncertainty shock process using fluctuations in …

framework starts by discerning driving forces set in motion by the initial shock. These are higher discounts applied by decision … institutions. The next step is to study how driving forces influence general equilibrium, both at the time of the initial shock and … later as its effects persist. Some of the effects propagate the effects of the shock---they contribute to poor performance …

Emerging markets business cycle models treat default risk as part of an exogenous interest rate on working capital …

shocks to aggregate uncertainty, I introduce a small, time-varying risk of economic disaster in a standard real business … risk of disaster does not affect the path of macroeconomic aggregates - a "separation theorem" between macroeconomic … variation in risk premia over time, are observationally equivalent to preference shocks. An increase in the perceived …

addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the …In this paper we: (i) provide a model of the endogenous risk intolerance and severe aggregate demand contractions … following a large real (non-financial) shock; and (ii) demonstrate the effectiveness of Large Scale Asset Purchases (LSAPs) in …