EconPapers    
Economics at your fingertips  
 

Idiosyncratic risk, insurance, and aggregate consumption dynamics: a likelihood perspective

Alisdair McKay

No 2013-013, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: This paper shows how the empirical implications of incomplete markets models can be assessed using the same full-information methods that are commonly used for representative agent models. It then asks what features of the microeconomic insurance arrangement are important for understanding the dynamics of aggregate consumption as it relates to aggregate labor income and employment conditions. A model with a low level of insurance against unemployment risk and an intermediate level of insurance against individual skill shocks provides the best fit of the aggregate data. A model that matches the strong consumption responses to fiscal stimulus payments does not improve the overall fit to the aggregate data.

Pages: 52 Creation date: 2013-13
New Economics Papers: this item is included in nep-dge
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.bu.edu/econ/files/2014/05/McKay-Idiosyn ... tion-July-2013-1.pdf First version, 2013 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.bu.edu/econ/files/2014/05/McKay-Idiosyncratic-risk-insurance-and-aggregate-consumption-July-2013-1.pdf [301 Moved Permanently]--> https://www.bu.edu/econ/files/2014/05/McKay-Idiosyncratic-risk-insurance-and-aggregate-consumption-July-2013-1.pdf)

Related works:
Working Paper: Idiosyncratic risk, insurance, and aggregate consumption dynamics: a likelihood perspective (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bos:wpaper:wp2013-013

Access Statistics for this paper

More papers in Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Program Coordinator (iedcoord@bu.edu).

 
Page updated 2025-02-14
Handle: RePEc:bos:wpaper:wp2013-013