Born, Benjamin; Pfeifer, Johannes - 2013 - This version: July 11, 2013, First Version: December 2010
The argument that policy risk, i.e., uncertainty about monetary and fiscal policy, has been holding back the economic … business cycle fluctuations by using an estimated New Keynesian model featuring policy risk as well as uncertainty about … technology. We directly measure uncertainty from aggregate time series and find considerable evidence of time-varying policy risk …
