; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Household Heterogeneity and Real Exchange Rates"; ; "batchuser@example.com"; "Kocherlakota, Narayana Rao, 1963-", "Pistaferri, Luigi"; "Federal Reserve Bank of Minneapolis"; "Real exchange rate", "Precautionary savings", "Market incompleteness", "Pareto optimality"; "E21 - Macroeconomics: Consumption; Saving; Wealth", "F31 - Foreign Exchange", "D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement"; "Typical incomplete markets models in international economics make two assumptions. First, households are not able to fully insure themselves against country-specific shocks. Second, there is a representative household within each country, so that households are fully insured against idiosyncratic shocks. We assume instead that cross-household risk-sharing is limited within countries, but cross-country risk-sharing is complete. We consider two types of limited risk-sharing: domestically incomplete markets (DI) and private information-Pareto optimal (PIPO) risk-sharing. We show that the models imply distinct restrictions between the cross-sectional distributions of consumption and real exchange rates. We evaluate these restrictions using household-level consumption data from the United States and the United Kingdom. We show that the PIPO restriction fits the data well when households have a coefficient of relative risk aversion of around 5. The analogous restrictions implied by the representative agent model and the DI model are rejected at conventional levels of significance."^^; "2006-04"; "2019-06-21T15:32:52.612833546+00:00"^^; "https://doi.org/10.21034/sr.372"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "Thu Nov 7 21:46:58 2019"; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "613", "410"; "Staff report (Federal Reserve Bank of Minneapolis. Research Department)"; "372"; "Market incompleteness", "Precautionary savings", "Real exchange rate", "Pareto optimality"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; "Published in: _The Economic Journal_ (Vol. 117, 2007, pp. C1-C25) https://doi.org/10.1111/j.1468-0297.2007.02032.x. "^^; ; "Publication" . ; .