, and makes precise the notion of balance sheet vulnerability. It also sheds some light on the role of asset prices in …

Many existing measures of vulnerability lack a theoretical basis. In this paper we propose to measure vulnerability … strongly on the time horizon considered. We use the model to assess the accuracy of existing regression-based vulnerability …

Most measures of vulnerability are a-theoretic and essentially static. In this paper we use a stochastic Ramsey model … to find a household's optimal welfare and we measure vulnerability as the shortfall from the welfare attained if the … household consumed permanently at the poverty line. The results indicate that vulnerability is very sensitive to the time …