Structural Breaks in an Endogenous Growth Model

Timothy Cogley, Boyan Jovanovic

    Research output: Contribution to journalArticlepeer-review


    We study the effects of parameter uncertainty prompted by structural breaks. In our model, agents respond differently to uncertainty prompted by regime shifts in shock processes than they react to comparable perceived increases in shock volatility. The magnitude of the response to an increase in uncertainty about TFP associated with a structural break is greater than that of a response to a comparable perceived rise in volatility. This is because lifetime utility varies more when shocks shift beliefs and perceived wealth.

    Original languageEnglish (US)
    Pages (from-to)666-694
    Number of pages29
    JournalReview of Economic Studies
    Issue number2
    StatePublished - Mar 1 2022


    • General equilibrium
    • Learning
    • Structural breaks
    • Uncertainty shocks
    • Volatility shocks

    ASJC Scopus subject areas

    • Economics and Econometrics


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