facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of … optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income … risk. Its sign depends on the extent of risk and on the Pareto weight of future generations. If the Ramsey tax rate that …

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium effects of … aggregate saving rate that is independent of income risk, whereas the optimal time-invariant tax on capital implementing this … saving rate is increasing in income risk. The optimal saving rate is constant along the transition and its sign depends on …

We extend the canonical income process with persistent and tran- sitory risk to cyclical shock distributions with left … dispersion and left-skewness. We then show that in a standard incomplete-markets life-cycle model, first, higher- order risk has … sizable welfare implications, which depend on risk atti- tudes; second, it matters quantitatively for the welfare costs of …

productivity and aggregate business cycle risk. We show analytically that the whole welfare benefit from joint insurance against … both risks is greater than the sum of benefits from insurance against the isolated risk components. One reason is the … convexity of the welfare gain in total risk. The other reason is a direct risk interaction which amplifies the utility losses …

in closed form and show that joint presence of both risks leads to over-proportional risk exposure for households. This …

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium effects of … exhibits an optimal aggregate saving rate that is independent of income risk, whereas the optimal time-invariant tax on capital … implementing this saving rate is increasing in income risk. The optimal saving rate is constant along the transition and its sign …