macroeconomic aggregates to these shocks. Researchers commonly report the vector of pointwise posterior medians of the impulse … responses as a measure of central tendency of the estimated response functions, along with pointwise 68% posterior error bands …

. Substantial heterogeneity in the estimated parameters and stochastic processes translates into a rich array of impulse responses …

significantly affected by the business cycle variable. Impulse responses to a business cycle shock show that both job-finding and …

allow us to pick for both estimates impulse responses that are valid and relevant for prediction. We illustrate our findings …