Pareto Weights as Wedges in Two-Country Models
34 Pages Posted: 7 Dec 2015 Last revised: 30 Jun 2023
Date Written: December 2015
Abstract
In models with recursive preferences, endogenous variation in Pareto weights would be interpreted as wedges from the perspective of a frictionless model with additive preferences. We describe the behavior of the (relative) Pareto weight in a two-country world and explore its interaction with consumption and the real exchange rate.
Suggested Citation: Suggested Citation
Backus, David K. and Coleman, Chase and Ferriere, Axelle and Lyon, Spencer, Pareto Weights as Wedges in Two-Country Models (December 2015). NBER Working Paper No. w21773, Available at SSRN: https://ssrn.com/abstract=2700002
Do you have negative results from your research you’d like to share?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.