Publications [#346279] of David Berger

Journal Articles

1. Berger, D; Bocola, L; Dovis, A, Imperfect Risk Sharing and the Business Cycle, Quarterly Journal of Economics, vol. 138 no. 3 (August, 2023), pp. 1765-1815, Oxford University Press (OUP) [doi]
   (last updated on 2026/01/17)

   Abstract:
   This article studies the macroeconomic implications of imperfect risk sharing implied by a class of New Keynesian models with heterogeneous agents. The models in this class can be equivalently represented as a representative-agent economy with wedges. These wedges are functions of households' consumption shares and relative wages, and they identify the key cross-sectional moments that govern the impact of households' heterogeneity on aggregate variables. We measure the wedges using U.S. household-level data and combine them with a representative-agent economy to perform counterfactuals. We find that deviations from perfect risk sharing implied by this class of models account for only 7% of output volatility on average but can have sizable output effects when nominal interest rates reach their lower bound.