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On Efficiency and Distribution


  • Lucas, Robert E, Jr


This paper is a theoretical study of alternative ways of allocating resources in an exchange economy in which individual preferences are subject to unpredictable shocks that cannot be monitored. Efficiency in this economy requires wealth inequality to increase over time. The paper is based on the author's 1991 Harry Johnson Lecture. Copyright 1992 by Royal Economic Society.

Suggested Citation

  • Lucas, Robert E, Jr, 1992. "On Efficiency and Distribution," Economic Journal, Royal Economic Society, vol. 102(411), pages 233-247, March.
  • Handle: RePEc:ecj:econjl:v:102:y:1992:i:411:p:233-47

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    References listed on IDEAS

    1. Engle, R. F. & Granger, C. W. J. (ed.), 1991. "Long-Run Economic Relationships: Readings in Cointegration," OUP Catalogue, Oxford University Press, number 9780198283393, June.
    2. Koop, Gary, 1991. "Intertemporal Properties of Real Output: A Bayesian Analysis," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 253-265, July.
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    Cited by:

    1. Clemens, Christiane & Soretz, Susanne, 1999. "Konsequenzen des Zins- und Einkommensrisikos auf das wirtschaftliche Wachstum," Hannover Economic Papers (HEP) dp-221, Leibniz Universit├Ąt Hannover, Wirtschaftswissenschaftliche Fakult├Ąt.
    2. Radim Bohacek, 2000. "Capital Accumulation in an Economy with Heterogeneous Agents and Moral Hazard," CERGE-EI Working Papers wp165, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Hongyi Li & Danyang Xie & Heng-Fu Zou, 2000. "Dynamics of income distribution," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 937-961, November.
    4. Horvath, Michal, 2012. "Computational accuracy and distributional analysis in models with incomplete markets and aggregate uncertainty," Economics Letters, Elsevier, vol. 117(1), pages 276-279.
    5. Satya P. Das, "undated". "North-South Trade, Capital Accumulation and Personal Distribution of Wealth and Income," EPRU Working Paper Series 99-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    6. Collins, Anne D. & Lim, Jamus Jerome, 2010. "Recognition, redistribution, and liberty," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 240-252, June.
    7. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
    8. Aiyagari, S. Rao & Williamson, Stephen D., 2000. "Money and Dynamic Credit Arrangements with Private Information," Journal of Economic Theory, Elsevier, vol. 91(2), pages 248-279, April.
    9. Shengxing Zhang & Nobuhiro Kiyotaki, 2017. "Intangibles, Inequality and Stagnation," 2017 Meeting Papers 1414, Society for Economic Dynamics.
    10. Ethan Ligon, 2007. "Risk and the Evolution of Inequality in China in an Era of Globalization," NBER Chapters,in: Globalization and Poverty, pages 599-628 National Bureau of Economic Research, Inc.
    11. Radim Bohacek, 2001. "Capital Accumulation And Moral Hazard In An Economy With Heterogeneous Agents," CeNDEF Workshop Papers, January 2001 1B.2, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    12. Lacker, Jeffrey M., 1997. "Clearing, settlement and monetary policy," Journal of Monetary Economics, Elsevier, vol. 40(2), pages 347-381, October.
    13. Fujiwara, Ippei & Wang, Jiao, 2017. "Optimal monetary policy in open economies revisited," Journal of International Economics, Elsevier, vol. 108(C), pages 300-314.
    14. repec:udc:esteco:v:44:y:2017:i:1:p:105-119 is not listed on IDEAS
    15. Pamela Labadie, 2008. "Retrading in Competitive Equilibria with Adverse Selection," 2008 Meeting Papers 838, Society for Economic Dynamics.
    16. Narayana Kocherlakota, 2007. "Money and Bonds: An Equivalence Theorem," Levine's Bibliography 843644000000000161, UCLA Department of Economics.
    17. Shouyong Shi, 2006. "A Microfoundation of Monetary Economics," Working Papers tecipa-211, University of Toronto, Department of Economics.
    18. Robson, Arthur J & Wooders, Myrna, 1997. "On the Growth-Maximizing Distribution of Income," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 511-526, August.

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