This paper analyses the welfare effects of changes in cross-sectional wage dispersion, using a class of tractable heterogeneous-agent economies. We emphasize a trade-off in the welfare calculation that arises when labour supply is endogenous. On the one hand, as wage uncertainty rises, so does...

This Paper explores the implications of the recent sharp rise in US wage inequality for welfare and the cross-sectional distributions of hours worked, consumption and earnings. From 1967 to 1996 cross-sectional dispersion of earnings increased more than wage dispersion, due to a rise in the...

This paper develops an analytical framework to study consumption and labour supply in a rich class of heterogeneous-agent economies with partial insurance. The environment allows for trade in non-contingent and state-contingent bonds, for permanent and transitory idiosyncratic productivity...

Data on the life-cycle profiles of inequality in wages, earnings, hours worked and consumption contains precious information for answering questions about the ability of households to insure labor market risk and about the sources of this risk. This Paper demonstrates that the choice of whether...

The relationship between unemployment and the rate of change of money wages in interwar Britain is re-examined. It is argued that improved estimates of the wage equation can be obtained by taking account explicitly of factors which change the level of excess demand associated with the measured...

The paper surveys the evidence on British economic growth performance since the war. It is shown that the hypotheses proposed by Bacon and Eltis, Kaldor and Thirlwall to account for slow growth are inadequate and that supply side problems leading to poor productivity performance are the most...