Consumption risk sharing with private information and limited enforcement

0482117 - NHU-C 2018 RIV US eng J - Článek v odborném periodiku
Broer, T. - Kapička, Marek - Klein, P.
Consumption risk sharing with private information and limited enforcement.
Review of Economic Dynamics. Roč. 23, January (2017), s. 170-190. ISSN 1094-2025. E-ISSN 1096-6099
Institucionální podpora: Progres-Q24
Klíčová slova: consumption insurance * private information * limited enforcement
Obor OECD: Economic Theory
Impakt faktor: 1.620, rok: 2017

We study consumption risk sharing when individual income shocks are persistent and not publicly observable, and individuals can default on contracts at the price of financial autarky. We find that, in contrast to a model where the only friction is limited enforcement, our model has observable implications that are similar to those of an Aiyagari (1994) selfinsurance model and therefore broadly consistent with empirical observations. However, some of the implied effects of changes in policy or the economic environment are noticeably different in our model compared to self-insurance.
Trvalý link: http://hdl.handle.net/11104/0277525