This paper presents a methodology for comparing income rank volatility profiles over time and across distributions …

can decelerate growth in the absence of any level shocks. In contrast to level risk, which is always welfare reducing for … a risk-averse household, volatility risk can increase or decrease welfare, depending on model parameters. When … calibrated to U.S. data, the model finds that the welfare cost of volatility risk is largely negligible under plausible model …

important source of consumption risk as two thirds of households are involved in some level of agricultural production. For … South Africa, we focus on labor market risk proxied by transitions from formal employment to informal work or unemployment …

We generalize the canonical permanent-transitory income process to allow for infrequent shocks. The distribution of … income growth rates can then have a discrete mass point at zero and fat tails as observed in income data. We provide … analytical formulas for the unconditional and conditional distributions of income growth rates and higher-order moments. We prove …