Kitao, Sagiri; Jeske, Karsten - Society for Economic Dynamics - SED - 2007
We set up a model with uninsurable idiosyncratic risk in the tradition of Bewley and Aiyagari. In addition to labor income shocks we also model health expenditure shocks and a health insurance market that allows imperfect insurance against expenditure shocks, calibrated to U.S. data on health...