Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/59030 
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dc.contributor.authorSchulhofer-Wohl, Samen
dc.date.accessioned2012-06-18T13:45:56Z-
dc.date.available2012-06-18T13:45:56Z-
dc.date.issued2007-
dc.identifier.urihttp://hdl.handle.net/10419/59030-
dc.description.abstractI 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 uctuations in consumption are essentially irrelevant not just for the average person- the surprising finding of Lucas (1987)- 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.en
dc.language.isoengen
dc.publisher|aPrinceton University, Woodrow Wilson School of Public and International Affairs |cPrinceton, NJen
dc.relation.ispartofseries|aDiscussion Papers in Economics |x235en
dc.subject.jelE32en
dc.subject.jelE21en
dc.subject.ddc330en
dc.subject.keywordbusiness cyclesen
dc.subject.keywordrisk aversionen
dc.subject.keywordrisk sharingen
dc.subject.keywordheterogeneityen
dc.subject.stwKonjunkturen
dc.subject.stwSoziale Kostenen
dc.subject.stwRisikoaversionen
dc.subject.stwVersicherungen
dc.subject.stwProduktivitäten
dc.subject.stwTheorieen
dc.titleHeterogeneous Risk Preferences and the Welfare Cost of Business Cycles-
dc.typeWorking Paperen
dc.identifier.ppn587308427en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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