Supplement to "Uncertainty Shocks in a Model of Effective Demand: Comment"

This supplement extends our analysis along three dimensions. One, it provides additional analytical results that show how the specification of the preference shock in recursive, Epstein and Zin (1991), preferences affects equilibrium outcomes. Two, it explores the implications of using a risk premium shock instead of a preference shock and additively separable preferences in consumption and leisure. Three, it conducts further sensitivity analysis on the parameters.

Supplemental Authors: 
de Groot, Oliver - University of Liverpool
Richter, Alexander - Federal Reserve Bank of Dallas
Throckmorton, Nathaniel - College of William and Mary
Online Appendix