Davila, Julio; Hong, Jay H.; Krusell, Per; Rull, … - Maison des Sciences Économiques, Université Paris 1 … - 2005
We investigate the welfare properties of the one-sector neoclassic growth model with uninsurable idiosyncratic shocks. We focus on the constrained efficiency notion of the general equilibrium literature, and we demonstrate constrained inefficiency for our model. We provide a characterization of...