The Price of Growth: Consumption Insurance in China 1989–2009

Raul Santaeulalia-Llopis () and Yu Zheng

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 4, 1-35

Abstract: We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consumption and income data. We find that consumption insurance deteriorates along the growth process with a transmission of permanent income shocks to consumption that at least triples from 1989 to 2009. Although preliminary, our welfare analysis suggests that the loss of consumption insurance can have first-order implications for the welfare assessment of economic growth.

JEL-codes: D12 E21 O12 O47 P24 P25 P36 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20160250
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Citations: View citations in EconPapers (15)

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Related works:
Working Paper: The Price of Growth: Consumption Insurance in China 1989-2009 (2017)
Working Paper: The Price of Growth: Consumption Insurance in China 1989-2009 (2016)
Working Paper: The Price of Growth: Consumption Insurance in China 1989-2009 (2016)
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