Date: 2016
Type: Working Paper
The price of growth : consumption insurance in China 1989-2009
Working Paper, EUI ECO, 2016/13
SANTAEULÀLIA-LLOPIS, Raül, ZHENG, Yu, The price of growth : consumption insurance in China 1989-2009, EUI ECO, 2016/13 - https://hdl.handle.net/1814/43944
Retrieved from Cadmus, EUI Research Repository
The welfare gains of economic growth hinge on the ability of households to insure consumption against the risks associated with growth. We exploit a novel and unique opportunity to study this question using China, an economy that has witnessed enormous and sustained growth and for which we build a long panel of household-level consumption and income. We find that consumption insurance deteriorates along the growth process with a transmission of permanent income shocks to consumption that triples from 1989 to 2009. The loss of consumption insurance has implications for the welfare assessment of economic growth across time and across space.
Cadmus permanent link: https://hdl.handle.net/1814/43944
ISSN: 1725-6704
Series/Number: EUI ECO; 2016/13
Keyword(s): Income risk Consumption insurance Growth Welfare China O4 D1