We evaluate the impact of increased income uncertainty and financial liberalization in the US on consumption volatility and household welfare. We estimate Euler equations and measure the volatility of unpredictable changes in consumption as the squared Euler equation residuals. We directly...

Sectors with increasing returns to scale have been shown to amplify business cycles exhibiting more volatility than others. Our hypothesis is that this volatility could be a cause of the rdquo;'jobless recoveryquot; suggesting policies for employment generation. To test this hypothesis we...