Uncertainty about Welfare Effects of Consumption Fluctuations
CRED Working Paper No. 2011/01
37 Pages Posted: 26 Jan 2011
Date Written: January 25, 2011
Abstract
This paper proposes Bayesian estimates for welfare effects of consumption fluctuations and growth. Annual data from 82 developed and developing countries indicate a large degree of uncertainty as regards point estimates. Moreover, the comparison between the welfare gain from consumption stabilization and the welfare gain from growth yields inconclusive results for many developed and developing countries. These findings suggest the need for caution in drawing policy conclusions from point estimates
Keywords: Business Cycles, Growth, Welfare
JEL Classification: E52, F42, C33
Suggested Citation: Suggested Citation
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