Epstein-Zin preferences to study the volatility implications of a monetary policy shock. An unexpected increases in the policy … volatility effects of the shock are driven by agents' concern about the (in)ability of the monetary authority to reverse …

unanticipated shock of the same size. The inversion of the volatility effects of news shocks between rational and boundedly rational …

unanticipated shock of the same size. This inversion of the volatility effects of news shocks follows from the inverse relation …

-frequency identified monetary policy shocks with these measures of idiosyncratic shock volatility. We document a novel fact: monetary … policy has dampened real effects via the investment channel when firm-level TFP shock volatility is high. Our estimates for …