Public policies are the outcomes of complex intertemporal exchanges among politicians. The political institutions of a country constitute the framework within which these transactions are accomplished. We develop a transactions theory to understand the ways in which political institutions affect...

Much of the literature on consumption smoothing and on risk sharing has focused on the ability of the household as a unit to protect its consumption. Little is known about the ability of individual members of the household to keep consumption smooth over time or relative to other members of the...