A striking feature of U.S. data on income and consumption is that inequality increases with age. Using both panel data and an equilibrium life cycle model, we argue that this is informative for understanding the importance and the characteristics of idiosyncratic labor market risk. We find that...

This paper reviews three important issues in the literature on international and intranational risk sharing. First, we establish a comprehensive set of stylized facts for consumption risk sharing within and across countries. Consistent with the findings in the literature, we find that the...

We extend the Cole and Obstfeld model in a number of directions to more accurately assess the terms of trade channel. Two crucial theoretical extensions are: to allow multiple producers of each primary commodity and to allow for incomplete specialization.We find that the negative correlation...