Journal of Monetary Economics 2020 DOI: 10.1016/j.jmoneco.2019.10.009 View full text
Daniel R. Carroll, Sewon Hur

Abstract: How are the gains and losses from trade (disruptions) distributed across individuals within a country? First, we document that tradable goods constitute a larger fraction of expenditures for poor households. Second, we build a trade model with nonhomothetic preferences-to generate the documented relationship between tradable expenditure shares, income, and wealth-and uninsurable earnings risk-to generate heterogeneity in income and wealth. Third, we use the calibrated model to quantify the differential welfare…

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