idiosyncratic shocks. Even when prices are flexible and inflation can costlessly act as a shock absorber to restore fiscal … economy, the introduction of sticky prices can reduce the optimal volatility of taxes. …

This paper analyzes the impacts of news shocks on macroeconomic volatility. Whereas in any purely forward-looking model …, such as the baseline New Keynesian model, anticipation amplifies volatility, we obtain ambiguous results when including a …) to provide numerical evidence that news shocks increase the volatility of key macroeconomic variables in the euro area …

This paper analyzes the impacts of news shocks on macroeconomic volatility. Whereas anticipation amplifies volatility …) to provide numerical evidence that news shocks increase the volatility of key macroeconomic variables in the euro area … when compared to unanticipated shocks. -- Anticipated Shocks ; Business Cycles ; Volatility …

consumption volatility. A household's currently observed poverty status might therefore not be a good indicator of the household …

money demand falls, while a positive goods productivity shock raises temporary output and velocity. The paper explains such … velocity volatility at both business cycle and long run frequencies. With filtered velocity turning negative, starting during … important for velocity during less stable times and the goods productivity shock more important during stable times. -- business …