Critics of modern macroeconomics often raise concerns about unwarranted welfare conclusions and data mining. This paper illustrates these concerns with a thought experiment, based on the debate in environmental economics about the appropriate discount rate in climate change analyses: I set up an...

Gollier and Weitzman (2010) show that if future consumption discount rates are uncertain and persistent, the consumption discount rate should decline to its lowest possible value for events in the most distant future. In this paper, I argue that the lowest possible growth rate of consumption per...

We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance...

Participatory wealth rankings (PWRs) present an inclusive and inexpensive targeting method to identify poor households. They tend to be well received by participants but point to a systematically different understanding of welfare than implied by consumption-based rankings. This suggests that...

We analyze general equilibrium relationships between trade policy and the household distribution of income, decomposing social welfare into real income level and variance components through Gini and Atkinson indexes. We embed these inequality-adjusted social welfare functions in a general...

This paper provides arguments in favor of using subjective questions as a proxy to measure welfare and well-being. This approach makes it possible to avoid having to define welfare and well-being means and having to identify the relevant indicators. Instead, individuals themselves define their...