On the Structural Interpretation of the Smets-Wouters “Risk Premium” Shock
نویسنده
چکیده
This article shows that the “risk premium” shock in Smets and Wouters (2007) can be interpreted as a structural shock to the demand for safe and liquid assets such as short-term US Treasury securities. Several implications of this interpretation are discussed. JEL Classification Numbers: E00, E1, E3, E4, E5, G1
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