can decelerate growth in the absence of any level shocks. In contrast to level risk, which is always welfare reducing for … a risk-averse household, volatility risk can increase or decrease welfare, depending on model parameters. When … calibrated to U.S. data, the model finds that the welfare cost of volatility risk is largely negligible under plausible model …

This article investigates the business cycle behaviour of measures of perceived uncertainty and financial risk premia … in Germany over the past two decades. Both the perceived uncertainty and the financial risk premia are highly … shocks have a significantly small but temporary effect on output and financial risk premia and their overall contribution to …