study the impact of risk and the public sector on consumption-wealth ratio, growth and welfare, given the exogenous size of … the public sector. A higher weight of public consumption in the utility function raises the rate of growth due to a fall … in the consumption-wealth ratio. Then we show that consumptionwealth ratio and welfare are higher in an open economy than …

. Then we study the impact of changes in exogenous variables on consumption, growth, and welfare. Next, we show that … consumption-wealth ratio and welfare should be higher in an open economy than in a closed economy. We discuss whether open …