It's a Small Small Welfare Cost of Fluctuations
Lucas  has shown that in a representative agent framework, the potential welfare gain from stabilizing consumption around its mean is small. We provide an example and some insight for why Lucas' measure is an upper bound of the welfare cost of fluctuations in walrasian economies.
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- Per Krusell & Anthony A. Smith, Jr., "undated".
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38, Federal Reserve Bank of Minneapolis.
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"Solving the Stochastic Growth Model by Parameterizing Expectations,"
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