It’s a Small Small Welfare Cost of Fluctuations

Lucas [1987] has shown that in a representative agent framework, the potential welfare gain from stabilizing consumption around its mean is small. We provide an example and some insight for why Lucas’ measure is an upper bound of the welfare cost of fluctuations in walrasian economies.

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Year of publication:	2005
Authors:	Portier, Franck ; Puch, Luis A.
Institutions:	Facultad de Ciencias Económicas y Empresariales, Universidad Complutense de Madrid
Subject:	Cost of Business Cycles \| Dynamic General Equilibrium

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Extent:	application/pdf
Series:	Documentos de Trabajo del ICAE.
Type of publication:	Book / Working Paper
Language:	English
Notes:	9 pages
Classification:	E32 - Business Fluctuations; Cycles ; C63 - Computational Techniques ; C68 - Computable General Equilibrium Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008520476