SHERP

Welfare of Incomplete Markets Economy with Permanent as well as Transitory Shocks

Cited 0 time in webofscience Cited 0 time in scopus
Authors
Kim, Jinill
Issue Date
2002
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 15 (No. 3 2002): 369-394
Keywords
Incomplete markets; Welfare; Permanent shocks
Abstract
Under the assumption that shocks are transitory, the welfare properties of the incomplete markets economy with only bonds are well known. As agents become more patient, its behavior get closer to that of the complete markets economy. As shocks become more persistent, the incomplete markets economy behave much differently from the complete markets economy. This paper shows that, when shocks have permanent as well as transitory components, neither of these two properties is true. More patience does not always move the incomplete markets economy closer to the complete markets economy, and more persistence in growth rate shocks induces similarity between the incomplete markets economy and the complete markets economy.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1270
Files in This Item:
Appears in Collections:
College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.15(3) (Fall 2002)
  • mendeley

Items in S-Space are protected by copyright, with all rights reserved, unless otherwise indicated.

Browse