experiences a shock forcing it to start learning afresh. Firms differ in their information; more informed firms have lower … posterior variances in beliefs. An uncertainty shock is a rise in the probability that any given firm will lose its information … a prolonged recession followed by anemic recovery in response to an uncertainty shock. When confronted with a rise in …

shock in the data causes significant declines in output, consumption, investment, and hours worked. Standard general … usual stabilizing function because of the zero lower bound. We calibrate our uncertainty shock process using fluctuations in …