Guvenen, Fatih; McKay, Alisdair; Ryan, Conor B. - National Bureau of Economic Research - 2023
business cycle. In particular, the estimated process generates income fluctuations that display (i) flat and acyclical variance … business cycle income risk: income changes during a business cycle episode are partly predicted by income levels before that … cycle exposure. Incorporating the estimated process into a business cycle model adds only one state variable--as in the …