experiences a shock forcing it to start learning afresh. Firms differ in their information; more informed firms have lower … posterior variances in beliefs. An uncertainty shock is a rise in the probability that any given firm will lose its information … a prolonged recession followed by anemic recovery in response to an uncertainty shock. When confronted with a rise in …

preferences in view of ambiguity averse investors. An uncertainty shock raises the price of issuing debt which in turn affects the …

dividends next period as ambiguous. We calibrate the agent's ambiguity aversion to match only the first moment of the risk …

dividends next period as ambiguous. We calibrate the agent's ambiguity aversion to match only the first moment of the risk …

Most macroeconomic models fail to replicate the level, volatility, and countercyclicality of risk premia which has been …-varying risk of economic disaster. Both asset prices and macroeconomic aggregates respond to this time-varying risk. The model is … prices. An increase in the risk of disaster leads to a collapse of investment and a recession, with no current or future …

We embed a news shock, a noisy indicator of the future state, in a two-state Markovswitching growth model. Our … historical periods in which uncertainty and risk premia were elevated because of news shocks. …

uncertainty shock with respect to economies with stricter regulations. Using additional labor ow data from Germany, France and UK …