1,721,122 research outputs found
Risk Sharing Opportunities And Macroeconomic Factors In Latin American And Caribbean Countries: A Consumption Insurance Assessment
No full textThis paper evaluates the degree of
consumption insurance enjoyed by Latin American and
Caribbean countries, with respect to various reference
areas, by estimating a parameter expressing the sensitivity
of a country's consumption growth to a measure of
idiosyncratic shocks to income. The paper surveys common
econometric implementations of "consumption insurance
tests." The author proposes some econometric procedures
in order to detect the actual presence of international risk
sharing, as well as to assess the relative impact of
idiosyncratic versus aggregate shocks. The evidence suggests
that Latin American and Caribbean economies have been hit by
non-diversifiable income shocks, that idiosyncratic risk is
relatively more important than aggregate risk, and that some
countries in the region appear to enjoy a certain amount of
international risk diversification. The paper also
identifies some macroeconomic factors that may be
responsible for a higher or lower degree of risk pooling
(such as international openness, financial depth, and credit
availability). The findings show that the financial
development of an economy is a crucial factor in determining
the amount of risk sharing opportunities, as well as public
expenditure. The preliminary results also suggest that trade
openness and shocks to terms of trade play an important role
in determining the degree of insurability of such risks
Investment decisions and normalization with incomplete markets: a pitfall in aggregating shareholders' preferences.
No full textDirect measures of time preference
No full textThis work constitutes an attempt to estimate time preference factors in a direct way from survey data, without relying on consumption data and on particular estimation techniques.
By using microeconomic data obtained from the Bank of Italy Survey of Household Income and Wealth (for the year 2000) and a simple second order Taylor expansion of a generic utility function we will compute, for each agent, a utility discount factor. The interesting features of the dataset will also enable us to relate discount factors to a large number of social, economic, and demographic variables. Agents do appear to discount future utility flows at rates which vary
across age, education, civil status, income and wealth situations; more importantly, it is suggested that risk and market incompleteness should be considered as important determinants of time preference parameters
Consumption insurance in developing countries: the role of foreign trade, food reserves and international programs
No full textL’articolo ha l’obiettivo di analizzare e proporre una misurazione del livello di “assicurazione” del consumo alimentare nei paesi sottosviluppati. Il test proposto riesce a individuare l’importanza relativa dei vari meccanismi di assicurazione dal rischio di privazione di consumo . In particolare viene approfondita l’analisi della gestione degli stocks che appare uno dei fattori più rilevanti nei meccanismi di assicurazione del consumo alimentare.The article aims to analyze and propose a measurement of the level of "insurance" of food consumption in underdeveloped countries. The proposed test is able to identify the relative importance of the various mechanisms of insurance against the risk of deprivation of consumption. In particular, this in-depth analysis of the management of the stocks that appears one of the most significant factors in the mechanisms of insurance of food consumption
Growth and volatility reconsidered: reconciling opposite views
Full text linkMany contributions in the recent literature have investigated over the relationship between growth and its volatility, without getting a clear and unambiguous answer. Besides reassessing the well-known effect of output volatility on growth as benchmark analysis, this study aims at looking into the "black box" of the business cycle volatility by disentangling the impacts of volatility of GDP major components - i.e. private consumption, private investment and government expenditure - on growth, simultaneously considered. Our empirical analysis unveils a remarkably robust and strong negative correlation of consumption volatility with mean growth, and a positive one with volatility of investment and of public expenditure. If these findings shed some additional light on the (still controversial) relationship between economic fluctuations and growth, they also make it possible to compare the relative impact of each component, with possibly relevant policy implications. Importantly, this might reconcile opposite views about the issue, in that different empirical results might originate from the relative importance across empirical studies of the various components of volatility
Labor income and risky assets under market incompleteness: Evidence from Italian data
No full textTheory suggests that uninsurable income risk induces individuals to accumulate assets as a precautionary reserve of value. Most assets, however, bear rate of return risk, that can be diversified only if every asset is traded by a large number of individuals and arbitrage is frictionless. Using Italian micro-data, we find evidence of income and asset risks that affect consumption. Italian households are particularly well insured against illness but not against job losses. Moreover, we detect a positive, yet weak, effect of asset holding on the variability of consumption streams across households. © 2002 Elsevier Science B.V. All rights reserved
Potential consumption insurance in developing countries: the role of foreign trade, food reserves and international aid programs.
No full textHuman capital, self-esteem, and income inequality
No full textWe introduce into a human-capital based growth framework utility from self-esteem, driven by academic achievements. Self-esteem, through its effect on human capital, is shown to shape the intertemporal evolution and the persistence of income inequality, in general, and across population groups. Inequality persistence is obtained because of the wedge that the self-esteem component creates between households whose academic achievements are high enough as opposed to those whose achievements are insufficiently low. Among the several extensions, it is shown that controlling parenting style can exacerbate income inequality while reducing children’s self-esteem
The relevance of extrinsic uncertainty
No full textWhen the asset market is incomplete extrinsic risk is effective at competitive equilibrium allocations; this is the case whether commodities are exchanged indirectly, through the exchange of assets, or whether assets serve to transfer revenue and commodities are exchanged in spot markets. Individuals bear extrinsic risk for the benefit of exchanging commodities or transferring revenue in the absence of complete markets for the allocation of intrinsic risk
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