کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
985666 1480834 2008 20 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Heterogeneous risk preferences and the welfare cost of business cycles
موضوعات مرتبط
علوم انسانی و اجتماعی اقتصاد، اقتصادسنجی و امور مالی اقتصاد و اقتصادسنجی
پیش نمایش صفحه اول مقاله
Heterogeneous risk preferences and the welfare cost of business cycles
چکیده انگلیسی

I study the welfare cost of business cycles in a complete-markets economy where some people are more risk averse than others. Relatively more risk-averse people buy insurance against aggregate risk, and relatively less risk-averse people sell insurance. These trades reduce the welfare cost of business cycles for everyone. Indeed, the least risk-averse people benefit from business cycles. Moreover, even infinitely risk-averse people suffer only finite and, in my empirical estimates, very small welfare losses. In other words, when there are complete insurance markets, aggregate fluctuations in consumption are essentially irrelevant not just for the average person—the surprising finding of Lucas [Lucas, Jr., R.E., 1987. Models of Business Cycles. Basil Blackwell, New York] but for everyone in the economy, no matter how risk averse they are. If business cycles matter, it is because they affect productivity or interact with uninsured idiosyncratic risk, not because aggregate risk per se reduces welfare.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Review of Economic Dynamics - Volume 11, Issue 4, October 2008, Pages 761–780
نویسندگان
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