Idiosyncratic and aggregate risks, inequality and growth
dc.contributor.author | Getachew, Yoseph | |
dc.contributor.email | yoseph.getachew@up.ac.za | en_ZA |
dc.date.accessioned | 2017-05-12T07:33:20Z | |
dc.date.issued | 2017-04 | |
dc.description.abstract | The paper disaggregates productivity shocks at a firm level into idiosyncratic and aggregate risks, and studies their impacts on inequality, growth and welfare. It develops a growth model with human capital and incomplete insurance and credit markets that provides a closed-form solution for income inequality dynamics. We find that uninsured idiosyncratic risks are the most important determinants of inequality, growth and welfare. They are the source of nondegenerate wealth distribution. A lower weight of these shocks leads to lower steady-state inequality, higher growth and welfare. A redistribution of income that serves as social insurance against such risks increases welfare and decreases inequality. But, it also decreases growth by distorting individual consumption and saving decisions. | en_ZA |
dc.description.department | Economics | en_ZA |
dc.description.embargo | 2019-04-30 | |
dc.description.librarian | hb2017 | en_ZA |
dc.description.uri | http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8586 | en_ZA |
dc.identifier.citation | Getachew, YY 2017, 'Idiosyncratic and aggregate risks, inequality and growth', Bulletin of Economic Research, vol. 69, no. 2, pp. 109-123. | en_ZA |
dc.identifier.issn | 0307-3378 (print) | |
dc.identifier.issn | 1467-8586 (online) | |
dc.identifier.other | 10.1111/boer.12096 | |
dc.identifier.uri | http://hdl.handle.net/2263/60335 | |
dc.language.iso | en | en_ZA |
dc.publisher | Wiley | en_ZA |
dc.rights | © 2016 Board of Trustees of the Bulletin of Economic Research and John Wiley & Sons Ltd. This is the pre-peer reviewed version of the following article : Idiosyncratic and aggregate risks, inequality and growth, Bulletin of Economic Research, vol. 69, no.2, pp. 109-123, 2017. doi : 10.1111/boer.12096. The definite version is available at : http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8586. | en_ZA |
dc.subject | Inequality | en_ZA |
dc.subject | Growth | en_ZA |
dc.subject | Productivity shock | en_ZA |
dc.subject | Idiosyncratic risk | en_ZA |
dc.subject | Aggregate risk | en_ZA |
dc.subject | Welfare | en_ZA |
dc.title | Idiosyncratic and aggregate risks, inequality and growth | en_ZA |
dc.type | Postprint Article | en_ZA |