Idiosyncratic and aggregate risks, inequality and growth

dc.contributor.authorGetachew, Yoseph
dc.contributor.emailyoseph.getachew@up.ac.zaen_ZA
dc.date.accessioned2017-05-12T07:33:20Z
dc.date.issued2017-04
dc.description.abstractThe 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.departmentEconomicsen_ZA
dc.description.embargo2019-04-30
dc.description.librarianhb2017en_ZA
dc.description.urihttp://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8586en_ZA
dc.identifier.citationGetachew, YY 2017, 'Idiosyncratic and aggregate risks, inequality and growth', Bulletin of Economic Research, vol. 69, no. 2, pp. 109-123.en_ZA
dc.identifier.issn0307-3378 (print)
dc.identifier.issn1467-8586 (online)
dc.identifier.other10.1111/boer.12096
dc.identifier.urihttp://hdl.handle.net/2263/60335
dc.language.isoenen_ZA
dc.publisherWileyen_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.subjectInequalityen_ZA
dc.subjectGrowthen_ZA
dc.subjectProductivity shocken_ZA
dc.subjectIdiosyncratic risken_ZA
dc.subjectAggregate risken_ZA
dc.subjectWelfareen_ZA
dc.titleIdiosyncratic and aggregate risks, inequality and growthen_ZA
dc.typePostprint Articleen_ZA

Files

Original bundle

Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
Getachew_Idiosyncratic_2017.pdf
Size:
213.17 KB
Format:
Adobe Portable Document Format
Description:
Postprint Article

License bundle

Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
license.txt
Size:
1.75 KB
Format:
Item-specific license agreed upon to submission
Description: