The present paper thoroughly explores second-best efficient allocations in an adverse selection insurance economy. We start from a natural extension of the classical model, assuming less than perfect risk perceptions. We propose first and second welfare theorems, by means of which we describe efficiencyenhancing policies. Notions of weak and strong adverse selection are promising for interpreti...

An identity links the rate of economic growth, the speed of poverty reduction and changes in the distribution of income during some time period in a given country. A few authors used that identity to understand the causes for observed changes in poverty and to identify the exact role of economic growth in poverty reduction. Yet, many empirical cross-country studies of the relationship between g...

In response to a growing awareness of the potential impact climate change on financial stability, academics, institutions (FIs), central banks and supervisors (CB&S) have developed suite scenarios analytical tools assess forward-looking climate-related risks, inform macro-prudential policies, counterparty risk management business planning decisions. Climate scenario analysis brings new ...

This paper studies the relationship between temperature and productivity across space and time. First, using six separate datasets—the annual Current Population Survey (CPS, 1963-2015), the monthly CPS (1994-2014), the Census (1900-2015), the Quarterly Census of Employment andWages (QCEW, 1990-2014), the Longitudinal Employer-Household Dynamics (LEHD, 1997-2014), and the County Business Pattern...

Arguments about the appropriate discount rate often start by assuming a Utilitarian social welfare function with isoelastic utility, in which the consumption discount rate is a function of the (constant) elasticity of marginal utility along with the (much discussed) utility discount rate. In this model, the elasticity of marginal utility simultaneously reflects preferences for intertemporal sub...

Previous literature on the distribution of willingness to pay has focused on its heterogeneity distribution without addressing exact interval estimation. In this paper we derive and analyze Bayesian confidence sets for quantifying uncertainty in the determination of willingness to pay for carbon dioxide abatement. We use two empirical case studies: household decisions of energy-efficient heatin...

The assumption of the stability of preferences is a fundamental one in the theory of the consumer. Many papers within the stated preferences literature have tested this assumption, and have found mixed results. Individuals may become more sure of their preferences as they repeat a valuation task or purchase decision; they may also learn more about prices and quantities of substitutes or complem...

Does temperature affect real economic activity? Using the annual Current Population Survey between 1963 and 2015, we show that there is no association between temperature and earnings, hours, or output after controlling for time-invariant spatial heterogeneity and timevarying demographic factors. These results are robust to five separate sources of micro-data, different sampling horizons, funct...