The paper reexamines the welfare economics of intergenerational risk. Risk and its resolution over time are modeled as … a decision tree: in each period, the consumption of the current one-period living generation is to be traded-off against … preferences to (i) disentangle aversion to intergenerational inequality from aversion to risk, (ii) exhibit a preference for early …

assumption of (intertemporal) risk neutrality reduces the growth effect in social discounting and significantly amplifies the … importance of risk and correlation. Second, debate and models largely overlook the difference in attitude with respect to risk … and with respect to non-risk uncertainty. The paper derives the resulting changes of the risk-free and the stochastic …

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility … and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk …

than the multiplier for nondurable goods. Standard models predict small durables multipliers because private sector …

a richer risk attitude than that captured in the standard discounted expected utility model. I derive three models that … permit a more comprehensive risk evaluation. These preference representations differ regarding the consistency requirements …

optimal consumption-investment problem with labor income. The utility function is unbounded and uncertainty stems from a …

literature that, when there is (only) risk type uncertainty, the optimal GR contract with renewal price set at the actuarially … fair price for low risk types provides full insurance against reclassification risk. We develop a model that includes … unpredictable (and unobservable) fluctuations in demand for life insurance as well as changes in risk type (observable) over …

property loss is shown to play the role of subsistence consumption in the analysis. Then, quot;securityquot; becomes a … consume. Consequently, an increase in volatility would encourage those with a greater-than-unity relative risk aversion to … purchase more insurance at the expense of current consumption …