Two key components of the recent U.S. health reform are a new regulation of the individual health insurance market and an increase in income redistribution in the economy. Which component contributes more to the welfare outcome of the reform? We address this question by constructing a general...

This paper highlights the identification problem of the reduced-form approach in quantifying the degree of consumption insurance as in Blundell et al. (2008, BPP thereafter). I argue that the reduced-form estimates are difficult to interpret in terms of the degree of consumption insurance. I...

I study the welfare cost of business cycles in a complete-markets economy where some people are more risk averse than others. Relatively more risk-averse people buy insurance against aggregate risk, and relatively less risk-averse people sell insurance. These trades reduce the welfare cost of...