There has been a revival of interest in the effect of risk on economic growth. We quantify both ex ante and ex post … effects of risk using a stochastic version of the Ramsey model. We develop a simulation-based econometric methodology which … remarkable long-running panel data set for rural households in Zimbabwe. We find that risk substantially reduces growth: in the …

-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested …. Using a unique panel data set for four African countries we find strong evidence of risk sharing. Workers in effect offer … insurance to employers: when firms are hit by temporary shocks the effect on profits is cushioned by risk sharing with workers …