We study the implications of alternative monetary targeting procedures for real interest rates and economic activity. We find that countercyclical monetary policy rules lead to higher real interest rates, higher average tax rates, lower output but lower variability of tax rates and consumption...

We consider the role uncertainty in incomplete markets environment that includes housing sector. Frictions such as poorly functioning rental and mortgage markets are likely important in accounting for cross-sectional issues such as life-cycle consumption and savings patterns. To incorporate some...

This paper analyzes the role of uncertainty in a multi-sector housing model with financial frictions. We include time varying uncertainty (i.e. risk shocks) in the technology shocks that affect housing production. The analysis demonstrates that risk shocks to the housing production sector are a...