Duncan, Alfred James Michael (2016) Private information and aggregate risk sharing. Discussion paper. University of Glasgow (KAR id:70519)
PDF
Author's Accepted Manuscript
Language: English |
|
Download (238kB)
Preview
|
Preview |
This file may not be suitable for users of assistive technology.
Request an accessible format
|
Abstract
When individuals have private information about their own luck and income, the sharing of idiosyncratic risks is hampered by moral hazard. This friction also affects the optimal sharing of aggregate risks. Optimal allocations restrict the exposure of low wealth agents’ consumption to business cycle risk. This encourages truth-telling by high wealth agents who have a high tolerance for aggregate risk, thereby increasing the extent to which idiosyncratic risks can be shared. Implementation of these optimal allocations requires restrictions in the trade of securities contingent on aggregate outcomes.
Item Type: | Monograph (Discussion paper) |
---|---|
Uncontrolled keywords: | Incomplete markets, aggregate risk, distribution |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Divisions > Division of Human and Social Sciences > School of Economics |
Depositing User: | Alfred Duncan |
Date Deposited: | 30 Nov 2018 16:17 UTC |
Last Modified: | 16 Feb 2021 13:59 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/70519 (The current URI for this page, for reference purposes) |
Duncan, Alfred James Michael: | ![]() |
- Link to SensusAccess
- Export to:
- RefWorks
- EPrints3 XML
- BibTeX
- CSV
- Depositors only (login required):