Lee, Minjoon; Bai, Jinhui; Zhang, Fudong; Bachmann, Ruediger - Society for Economic Dynamics - SED - 2014
This paper quantifies the distributional costs of fiscal uncertainty in a neoclassical stochastic growth environment. We set up an incomplete-market model where heterogeneous households face uninsurable idiosyncratic risks in the processes of labor income and discount factor. Aggregate...