We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation … imbalances. We then show that a micro-founded model that features policy uncertainty accounts for these stylized facts. Finally …, we highlight that policy uncertainty arises at the zero lower bound because of a trade-off between mitigating the …

While high uncertainty is an inherent implication of the economy entering the zero lower bound, deflation is not …

High uncertainty is an inherent implication of the zero lower bound, while deflation is not because of inflationary … pressure due to uncertainty about how debt will be stabilized. We show that policy uncertainty empirically accounts for the …

indicators to guide monetary policy decisions. However, these gaps are estimated with a large margin of uncertainty, especially … when composed mainly of TFP gaps. Given the high uncertainty of output gap estimates at present, monetary policy should put … of underlying fiscal balances being reasonably robust to output gap uncertainty. …

This paper studies the effects of three financial shocks in the economy: a net-worth shock, an uncertainty or risk …