frictions render labor-market risk countercyclical and endogenous to monetary policy. Our main result is that a majority of …

Since the 1970s, income risk faced by households has increased and monetary policy transmission has become weaker. I … investigate the role of income risk in weakening monetary policy transmission. I first show analytically that increased income … risk weakens the substitution effect of interest rate changes but amplifies the income effect from wage changes. The first …

frictions render labor-market risk countercyclical and endogenous to monetary policy. Our main result is that a majority of …