consumption-saving model with labor income risk and incomplete markets to relate income dynamics to consumption and welfare, and … income process. The empirical application of our framework using data on individual incomes from Mexico provides striking …) welfare-neutral. A smaller part of measured income mobility is due to either welfare-reducing income risk or welfare …

with disdain for work. We propose an economic theory of preference formation where both the divergence of attitudes across … social classes and the ensuing reversal of economic fortunes are equilibrium outcomes. In our theory, parents shape their …

considers the evidence on return predictability, risk aversion and market efficiency. The paper then focuses on the theoretical …