Growth and Risk-Sharing with Private Information

Aubhik Khan and B Ravikumar

Working Papers from University of Iowa, Department of Economics

Abstract: We examine the impact of incomplete risk-sharing on growth and welfare. The source of market incompleteness in our economy is private information: a household's idiosyncratic productivity shock is not observable by others. Risk-sharing between households occurs through long- term contracts with intermediaries. We find that incomplete risk-sharing tends to reduce the rate of growth relative to the complete risk-sharing benchmark.

Keywords: RISK; CONTRACTS (search for similar items in EconPapers)
JEL-codes: E20 O16 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1997
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Growth and risk-sharing with private information (2001)
Working Paper: Growth and risk-sharing with private information (1999)
Working Paper: Growth and Risk-Sharing with Private Information (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:uia:iowaec:97-13

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