cope with risk. We also find evidence of a "pecking order" of coping methods in which savings appears to be first in the …

We study an endowment economy in which agents face income risk, as if uncertain returns on a portfolio, and agents can … only make transfers in states when they are actively participating in the market. Besides income risk, agents also have … – as in standard network models – but are more likely to trade when there are few traders, when income risk is high, when …

show that higher bankruptcy exemption levels benefit potential entrepreneurs who are risk averse by providing partial …

theory of unsecured credit account for the high volatility and procyclicality of credit and the high volatility and … countercyclical earnings risk (i.e., rather than having all households fare slightly worse than normal during recessions, we ensure … bankruptcy risk discouraging households from using credit. This finding contradicts the intuition that access to credit helps …

This paper studies the business-cycle variation in higher-order (labor) income risk—that is, risks that are captured by … analysis: the United States, Germany, and Sweden. Our analysis has three main results. First, using individual gross income, we …-sector jobs, among others. Second, household-level income displays cyclical patterns that are very similar to individual income …

) welfare-neutral. Only a small part of measured income mobility is due to either welfare-reducing income risk or welfare …This paper presents a framework for the quantitative analysis of individual income dynamics, mobility and welfare, with … ex-ante identical individuals facing a stochastic income process and market incompleteness implying that they are unable …

Efforts to reconcile inconsistencies between theory and estimates of the income elasticity of the value of a … how exogenous income shocks, such as unexpected medical expenditures, may affect labor supply decisions which in turn … influence both the coefficient of relative risk aversion and the IEVSL. The presence of a consumption commitment, such as a home …

trade model with income-risk neutrality there tends to be an uncertainty- increasing motive for a TA. With income-risk … degree of risk aversion, an uncertainty- reducing motive for a TA is more likely to be present when the economy is more open …

unconditional cross-sectional moments of household consumption growth and the moments of the risk-free rate, equity premium, price …-dividend ratio, and aggregate dividend and consumption growth. The model-implied risk-free rate and price-dividend ratio are … procyclical while the market return has countercyclical mean and variance. Finally, household consumption risk explains the cross …