This paper shows how uninsurable unemployment risk is crucial to qualitatively and quantitatively match macro responses … to uncertainty shocks. Empirically, uncertainty shocks i) generate deflationary pressure; ii) have considerably negative … jointly attain these results. Uncertainty shocks induce households' precautionary saving and firms' precautionary pricing …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states …, short-term as well as long-term unemployment. This allows us to examine the effects of persistence in the unemployment … process on portfolio choice. Our main findings are, first, that in case of short-term unemployment only, social security …

Households can rely on private savings or on public unemployment insurance to hedge against the risk of becoming … effects of unemployment on the portfolio choice of households in the US and in Germany. We distinguish short- and long …-term unemployment and find that, in case of short-term unemployment, unemployment insurance offsets the negative impact of unemployment …

larger earnings fluctuations than employees and that they frequently transition into unemployment. Given that the self …-employed are not eligible to unemployment insurance, I analyze the provision of benefits targeted at these risks using a calibrated … heterogeneity. This exercise suggests that extending the current U.S. unemployment insurance scheme to the self-employed comes with …