Insurance and economic growth

Taub, B. (1989) Insurance and economic growth. Journal of Public Economics, 38(2), pp. 249-264. (doi: 10.1016/0047-2727(89)90028-5)

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Individuals in a growing economy suffer from heterogeneous stochastic productivity shocks. In the absense of perfect information, income subsidies that encourage investment are efficient, and accelerate growth. The subsidies widen wealth disparities. The degree of the subsidy is an increasing function of the persistence of productivity shocks, rationalizing subsidies to investment in human capital.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Taub, Professor Bart
Authors: Taub, B.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Public Economics

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