Shleifer (2010), overreaction and confidence are affected by uncertainty, as a news effect interacts with an uncertainty effect … the conditional uncertainty, changes in uncertainty surrounding current and past beliefs affect the severity of the DE …) overconfidence in subjective uncertainty. An analytical RBC model featuring Smooth DE accounts for overreaction and overconfidence in …

Using textual analysis of the largest dealers' newsletters to their clients, we construct a measure of uncertainty … about the Federal Reserve's balance sheet policy (BSP). This measure of uncertainty tends to spike during the introduction … find that positive shocks to BSP uncertainty increase longer-term Treasury yields, private borrowing costs, private MBS …