Risk sharing with private and public information
نویسندگان
چکیده
منابع مشابه
Public versus private risk sharing
Can public income insurance through progressive income taxation improve the allocation of risk in an economy where private risk sharing is incomplete? The answer depends crucially on the fundamental friction that limits private risk sharing in the first place. If risk sharing is limited because insurance markets are missing for model-exogenous reasons (as in Bewley, 1986) publicly provided risk...
متن کاملGrowth and Risk-Sharing with Private Information
We examine the impact of incomplete risk-sharing on growth and welfare. The source of market incompleteness in our economy is private information: a household’s idiosyncratic productivity shock is not observable by others. Risk-sharing between households occurs through long-term contracts with intermediaries. We ...nd that incomplete risk-sharing tends to reduce the rate of growth relative to t...
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We consider an exchange economy with a continuum of agents, each of whom is subject to idiosyncratic endowment shocks. We study efficient allocations subject to two constraints: limited enforcement of financial contracts, and private information about the predictable component of the future endowment process. In our economy the immiseration result, common in this literature, does not hold, and ...
متن کاملTheoretical and Computational Appendix to: Public versus Private Risk Sharing
In this appendix we provide more extensive proofs of results in the main paper. In particular we explicitly prove results that are direct adaptations of arguments from Atkeson and Lucas (1995) and hence omitted in the main paper We also provide a detailed discussion of the algorithm used in the quantitative exercises of the main papers. 1 Proofs1 1.1 Optimal Policies Induce E¢ cient Allocations...
متن کاملPublic-Private Programs for Covering Extreme Events: The Impact of Information Distribution on Risk-Sharing
Recent extreme events have significantly raised the question of the role of public and private sectors in providing adequate financial protection to victims. Developing publicprivate insurance programs could constitute one of the most appealing ways to solve the problem of financing the consequences of those large-scale catastrophes. However, catastrophic risks present very specific characteris...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2020
ISSN: 0022-0531
DOI: 10.1016/j.jet.2019.104988