A number of existing studies have concluded that risk sharing allocations supported by competitive, incomplete markets equilibria are quantitatively close to first-best. Equilibrium asset prices in these models have been difficult to distinguish from those associated with a complete markets...

An important aspect of the current U.S. social security system is the tradeoff between the risk sharing it provides and the distortions it imparts on private decisions. We focus on this tradeoff as it applies to labor market risk and capital accumulation. Specifically, we compare the current...