NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Risk and Ambiguity in Models of Business Cycles

David Backus, Axelle Ferriere, Stanley Zin

NBER Working Paper No. 20319
Issued in July 2014
NBER Program(s):   AP   EFG

We inject aggregate uncertainty - risk and ambiguity - into an otherwise standard business cycle model and describe its consequences. We find that increases in uncertainty generally reduce consumption, but they do not account, in this model, for either the magnitude or the persistence of the most recent recession. We speculate about extensions that might do better along one or both dimensions.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20319

Published: Backus, David & Ferriere, Axelle & Zin, Stanley, 2015. "Risk and ambiguity in models of business cycles," Journal of Monetary Economics, Elsevier, vol. 69(C), pages 42-63. citation courtesy of

Users who downloaded this paper also downloaded these:
Kilenthong and Townsend w20275 A Market Based Solution to Price Externalities: A Generalized Framework
Murfin and Petersen w20310 Loans on sale: Credit market seasonality, borrower need, and lender rents
Dang, Gorton, Holmstrom, and OrdoƱez w20255 Banks as Secret Keepers
Breza, Chandrasekhar, and Larreguy w20309 Social Structure and Institutional Design: Evidence from a Lab Experiment in the Field
Nagel w20265 The Liquidity Premium of Near-Money Assets
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us