This Paper uses panel data on household consumption and income to evaluate the degree of insurance to income shocks …. Our aim is to describe the transmission of income inequality into consumption inequality. Our framework nests the special … cases of self-insurance and the complete markets assumption. We assess the degree of insurance over and above self-insurance …

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of …-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint … evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in …

-agent economies with partial insurance. The environment allows for trade in non-contingent and state-contingent bonds, for permanent … over the period 1967-1996. We then use the estimated parameter values to decompose inequality in all variables of interest …

The theory of full consumption insurance posits that households are insulated from all idiosyncratic shocks so that the … ratio of the marginal utilities of consumption of any two households is constant over time. Consumption insurance therefore … measurement error in consumption. The findings strongly reject the theory of full consumption insurance. …

Can public insurance through redistributive income taxation improve the allocation of risk in an economy in which … the first place. If risk sharing is incomplete because some insurance markets are missing for model-exogenous reasons (as … of risk. If instead private insurance markets exist but their use is limited by the absence of complete enforcement (as …

budgetary cost of a focused unemployment system are moderate, and that returning the unemployment insurance to its primary role …

extant research on consumption insurance find that people face substantial risks that they do not fairly pool. In theory, the …