On the Welfare Effects of Eliminating Business Cycles

  title={On the Welfare Effects of Eliminating Business Cycles},
  author={Per Krusell and Anthony A. Smith},
We investigate the welfare effects of eliminating business cycles in a model with substantial consumer heterogeneity. The heterogeneity arises from uninsurable and idiosyncratic uncertainty in preferences and employment, where, regarding employment, we distinguish among employment and shortand long-term unemployment. We calibrate the model to match the distribution of wealth in U.S. data and features of transitions between employment and unemployment. Unlike previous studies, we study how… CONTINUE READING
Highly Influential
This paper has highly influenced 11 other papers. REVIEW HIGHLY INFLUENTIAL CITATIONS
Highly Cited
This paper has 100 citations. REVIEW CITATIONS

From This Paper

Figures, tables, and topics from this paper.

Explore Further: Topics Discussed in This Paper


Publications citing this paper.

100 Citations

Citations per Year
Semantic Scholar estimates that this publication has 100 citations based on the available data.

See our FAQ for additional information.


Publications referenced by this paper.
Showing 1-10 of 19 references

Reconsidering the Costs of Business Cycles with Incomplete Markets,” in “NBER Macroeconomics Annual 1994,

A. Atkeson, C. Phelan
(S. Fischer and J. Rotemberg, • 1994
View 9 Excerpts
Highly Influenced

Relative Wage Movements and the Distribution of Consumption,

O. Attanasio, S. Davis
Journal of Political Economy • 1996
View 5 Excerpts
Highly Influenced

The Cost of Business Cycles with Indivisibilities and Liquidity Constraints,

A. İmrohoroğlu
Journal of Political Economy • 1989
View 8 Excerpts
Highly Influenced

A Microfoundation for Incomplete Security Markets,” working paper 577

H. Cole, N. Kocherlakota
Federal Reserve Bank of Minneapolis • 1997
View 1 Excerpt

Similar Papers

Loading similar papers…