Financial markets are central to the transmission of uncertainty shocks. This paper documents a new aspect of the … interaction between the two by showing that uncertainty shocks have radically different macroeconomic implications depending on … uncertainty is proxied by the (unobserved) volatility of the structural shocks, and a regime change occurs whenever credit …

rates. The single agent, in a dynamic exchange economy, treats the conditional uncertainty about the consumption and … dividends next period as ambiguous. We calibrate the agent's ambiguity aversion to match only the first moment of the risk …-free rate in data and measure the uncertainty each period conditional on the actual, observed histroy of (U.S.) macroeconomic …

This paper studies the effect of implementing fiscal rules on sovereign default risk and on the probability of large … that fiscal rules are beneficial for macroeconomic stability, as they significantly reduce both sovereign risk perception …

Banks may play a catalytic role, but their small size limits their ability to mitigate shock propagation. The ongoing Covid …-19 crisis is not a normal shock, is hitting central players and will likely provoke significant contagion. …

higher income and higher levels of consumption are affected more by this shock than households located towards the lower end … effect of this shock on aggregate output. …