What pay can a worker expect when he is unsure about his ability (or effort supply) and that of his co-workers? Workers have varying (unobserved) abilities, but can observe their distributions in the population. We uncover four findings. First, we uniquely characterize workers' expected pay in a...

The uncertainty of U.S. core inflation, measured by the stochastic volatility of forecast errors, has soared to a level not seen in nearly five decades since the COVID-19 pandemic hit the global economy. Prices, consumption, and production increase after a positive shock to core inflation...