This paper investigates the welfare costs of business cycles in a heterogeneous agent, overlapping generations economy which is distinguished by idiosyncratic labor market risk. Aggregate variation arises both in terms of aggregate productivity shocks and countercyclical variation in the...

This paper develops a new approach to make welfare assessments based on the notion of Dynamic Stochastic weights (DS-weights for short). For a large class of dynamic stochastic economies with heterogeneous individuals, we introduce an aggregate additive decomposition that satisfies desirable...

This paper develops a welfare accounting decomposition that identifies and quantifies the ultimate origins of welfare gains and losses in general economies with heterogeneous individuals and disaggregated production. The decomposition---exclusively based on preferences and technologies---first...

A prominent explanation for why trade is not free is politicians' desire to protect some of their constituents at the expense of others. In this paper we develop a methodology that can be used to reveal the welfare weights that a nation's import tariffs implicitly place on different groups of...

This review article, which was solicited by the Geneva Risk and Insurance Review, surveys work that has been done using an empirical framework for analyzing selection in insurance markets developed by Einav, Finkelstein, and Cullen (2010). We briefly review that framework, and then describe a...

We test whether occupational licensing undercuts a key goal of digital marketplaces-- to increase social surplus by increasing the effectiveness of customer search. Our setting is a large online marketplace in the $500B home services industry where a platform converts customer search into sales...

The standard revealed-preference approach to welfare economics encounters fundamental difficulties when the act of choosing directly affects welfare through emotions such as guilt, pride, and anxiety. We address this problem by developing an approach that redefines consumption bundles in terms...

Green hydrogen may decarbonize sectors which are difficult to electrify, and the recent Inflation Reduction Act (IRA) provides tax credits to encourage hydrogen production. We analyze a model in which hydrogen produced using electricity replaces natural gas. The electricity may be procured from...

Individuals might experience negative utility from not consuming a popular product. For example, being inactive on social media can lead to social exclusion or not owning luxury brands can be associated with having a low social status. We show that, in the presence of such spillovers to...

This paper considers the appropriate stabilization objectives for monetary policy in a microfounded model with staggered price-setting. Rotemberg and Woodford (1997) and Woodford (2002) have shown that under certain conditions, a local approximation to the expected utility of the representative...