*Risk Shocks*

Here is a new paper by Lawrence Christiano, Roberto Motto, and Massimo Rostagno, reporting from the frontiers of actual business cycle theory:

We augment a standard monetary DSGE model to include a Bernanke-Gertler-Gilchrist financial accelerator mechanism. We fit the model to US data, allowing the volatility of cross-sectional idiosyncratic uncertainty to fluctuate over time. We refer to this measure of volatility as ‘risk’. We find that fluctuations in risk are the most important shock driving the business cycle.

That is the NBER version, does anyone know of an ungated version?  (It is here.)  Here are the very useful overheads.

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