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 …

oil-price shock and the 9/11 terrorist attack. This paper offers a structural framework to analyze the impact of these … data. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound … medium term the increased volatility from the shock induces an overshoot in output, employment and productivity. Thus, second …

-2007 period. While the stock of reserves fails to smooth the transmission of CTOT shocks to REER during the Global Financial …

monetary policy. Adjusting to a large negative demand shock requires raising world aggregate demand, as well as redirecting … interest rates' to fall below zero in all countries, giving rise to a global 'liquidity trap'. This paper explores the policy … choices that maximize the joint welfare of all countries following such a shock, when governments cooperate on both fiscal and …

covers the key facts and mechanisms in the build-up of risk, the panics in short-term-debt markets, the policy reactions, and …

Global risk-off shocks can be highly destabilizing for financial markets and, absent an adequate policy response, may …-off shocks. In contrast, since one of the main channels through which emerging markets are historically affected by global risk … Global Financial Crisis (GFC). We document, however, that the unconventional policies adopted by the main central banks were …

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 …

The period preceding the global financial crisis was characterized by a substantial widening of current account … imbalances across the world. Since the onset of the crisis, these imbalances have contracted to a significant extent. In this …