Incentives and aggregate shocks

Research output: Contribution to journalArticlepeer-review

19 Scopus citations

Abstract

This paper presents an incentive-based theory of the dynamics of the distribution of consumption in the presence of aggregate shocks. The paper builds on the models concerning the distribution of income or consumption and incentive problems of Green (1987), Thomas and Worrall (1991), Phelan and Townsend (1991), and Atkeson and Lucas (1992). By incorporating aggregate production shocks, the model allows an examination of the interactions between individual and aggregate consumption series given incomplete insurance. Further, the methodology outlined allows the incorporation of incentive considerations to macroeconomic environments similar to Rogerson (1988) and Hansen (1985).

Original languageEnglish (US)
Pages (from-to)681-700
Number of pages20
JournalReview of Economic Studies
Volume61
Issue number4
DOIs
StatePublished - Oct 1994

Fingerprint Dive into the research topics of 'Incentives and aggregate shocks'. Together they form a unique fingerprint.

Cite this