We investigate the welfare effects of eliminating business cycles in a model with substantial consumer heterogeneity. The heterogeneity arises from uninsurable idiosyncratic uncertainty in preferences and employment status. We distinguish between short- and long-term unemployment. Long-term...

This paper analyzes the implications of plant-level dynamics over the business cycle. We first document basic patterns of entry and exit of U.S. manufacturing plants, in terms of employment and productivity, between 1972 and 1997. We show how entry and exit patterns vary during the business...

This paper explores the asset-price implications in economies where there is no direct insurance against idiosyncratic risks but there are other assets---such as a riskfree bond or equity---that can be used for self-insurance, subject to exogenously imposed borrowing limits. We analyze an...

Idson (1999).