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Author: Edward J. Bird
Publisher:
ISBN: 9783593348957
Category : Economic assistance, Domestic
Languages : en
Pages : 207
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Book Description
Author: Edward J. Bird
Publisher:
ISBN: 9783593348957
Category : Economic assistance, Domestic
Languages : en
Pages : 207
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Book Description
Author: Yonas Alem
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
Author: Erzo F. P. Luttmer
Publisher:
ISBN:
Category : Risk
Languages : en
Pages : 36
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Book Description
Policy uncertainty can reduce individual welfare when individuals have limited opportunities to mitigate or insure against consumption fluctuations induced by the policy uncertainty. For this reason, policy uncertainty surrounding future Social Security benefits may have important welfare costs. We field an original survey to measure the degree of policy uncertainty in Social Security and to estimate the impact of this uncertainty on individual welfare. On average, our survey respondents expect to receive only about 60 percent of the benefits they are supposed to get under current law. We document the wide variation around the expectation for most respondents and the heterogeneity in the perceived distributions of future benefits across respondents. This uncertainty has real costs. Our central estimates show that on average individuals would be willing to forego around 6 percent of the benefits they are supposed to get under current law to remove the policy uncertainty associated with their future benefits. This translates to a risk premium from policy uncertainty equal to 10 percent of expected benefits.
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Capital levy
Languages : en
Pages : 32
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Book Description
This paper studies the effect of policy uncertainty on the formation of new activities in Romer's (1994) type of an economy, where productivity of labor increases with the number of capital goods. Adding a new capital good requires a capital specific set-up cost, invested prior to using the capital good. Agents are disappointment averse, putting greater utility weight on downside risk [as modeled by Gul (1991)]. Policy uncertainty is induced by the Disappointment aversion implies that investment, labor and capitalists' income drop at a rate proportional to the standard deviation of the tax rate. Hence, policy uncertainty induces first-order adverse effects, whereas policy uncertainty leads to second-order effects when consumers maximize the conventional expected utility. The adverse effects of policy uncertainty can be partially overcome by a proper investment policy. The paper interprets the tax concessions granted to multinationals as a commitment device that helps overcoming the adverse implications of policy uncertainty.
Author: Joshua Aizenman
Publisher:
ISBN:
Category :
Languages : es
Pages : 18
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Author: Sven R Larson
Publisher: Routledge
ISBN: 1351754149
Category : Social Science
Languages : en
Pages : 176
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This title was first published in 2002: This monograph sets out to model a macroeconomy that is inherently unstable because of qualitative - or Keynesian - uncertainty. By modelling a macroeconomic theory, this approach to fixed or sticky prices also investigates the link between uncertainty, sticky prices, and macro-stability - by suggesting that such prices improve economic activity rather than impeding it.
Author: Edward Schlee
Publisher:
ISBN:
Category : Environmental policy
Languages : en
Pages : 8
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Book Description
Abstract: This paper proposes a simple index of the welfare significance of uncertainty in the public goods resulting as policy outcomes. Our measure is the ex ante compensation an individual would require to accept an uncertain level of service compared to receiving the expected value of the distribution of possible values for that service. Our compensation measure is a function of the coefficient of relative risk aversion, the variance in the measure of environmental service associated with policy and relevant for the individual, and a set of conventional parameters that describe the properties of nonmarket benefit measures under conditions of certainty. We would expect that the inverse virtual price elasticity of the for the environmental service and the square of the coefficient of relative variation are the primary factors influencing the size of our compensation index
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Robert J. Barro
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 30
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"Satisfactory calculations of the welfare cost of aggregate consumption uncertainty require a framework that replicates major features of asset prices and returns, such as the high equity premium and low risk-free rate. A Lucas-tree model with rare but large disasters is such a framework. In a baseline simulation, the welfare cost of disaster risk is large -- society would be willing to lower real GDP by about 20% each year to eliminate all disaster risk, including wars. In contrast, the welfare cost from usual economic fluctuations is much smaller, though still important -- corresponding to lowering GDP by around 1.5% each year"--National Bureau of Economic Research web site.
Author: Joshua Aizenman
Publisher:
ISBN:
Category : Economic development
Languages : en
Pages : 18
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Book Description
