This paper shows how uninsurable unemployment risk is crucial to qualitatively and quantitatively match macro responses … behaviors, triggering a fall in aggregate demand and supply. These precautionary behaviors increase the unemployment risk of the … imperfectly insured households, who strengthen precautionary saving. When the feedback loop between unemployment risk and …

. By stimulating labor demand, hiring subsidies reduce unemployment risk and precautionary savings. This increases the … equilibrium unemployment and incomplete markets. Quantitatively, I find that an increase in hiring subsidies reduces unemployment … more at the zero lower bound than it does during normal times. Central to this result is a precautionary savings channel …

endogenous firing as well as a short-time work decision. In recessions, short-time work reduces the unemployment risk of workers …, which mitigates their precautionary savings motive and aggregate demand falls by less. Using a quantitative model analysis … replacement rate can be more effective compared to an increase of the unemployment benefit replacement rate. …

recessions. First, we show that the consumption risk of short-time work is considerably smaller compared to unemployment using … risk of workers, which mitigates their precautionary savings motive. Using a quantitative model analysis, we show that this … frictions featuring an endogenous firing and short-time work decision. In recessions, short-time work reduces the unemployment …

addressing saving against unemployment risk in terms of changes in credit supply and households’ financial wealth. Time series …This paper contributes to the literature on the effects of uncertainty on household saving – a long-standing and … extensively explored topic yet leaving a number of issues inconclusive. It concentrates on the labor income uncertainty by …