We assume that individuals can fully insure themselves against cross-country shocks but not against individual-specific shocks. We consider two particular models of limited risk-sharing: domestically incomplete markets (DI) and private information-Pareto optimal (PIPO) risk-sharing. For each...

Friedman's book on the consumption function is one of the great works of Economics demonstrating how the interplay between theoretical ideas and data analysis can lead to major policy implications. We present a short review of Friedman's permanent income hypothesis, the origins of the idea and...

The definition of labor force participation in the standard labor supply model stands in sharp contrast to that used in compiling the labor force statistics. In standard labor supply models, only those supplying positive hours of work are considered to be labor force participants. On the other...

This mix of state and private pension provision in the United Kingdom provides a rare degree of variation in pension incentives for retirement. Using a sample of individuals from the UK Retirement Survey, the paper models the probability of retirement in terms of the incentives underlying the...