Abstract

This paper provides an explanation for situations in which the fundamental state variables describing the economy do not change, but aggregate consumption experiences significant changes. We present a theory of pseudo-wealth—individuals’ perceived wealth that is derived from expectations of gains in bets arising from heterogeneous expectations. This wealth is divorced from society's real assets. The creation of a market for bets necessarily generates positive pseudo-wealth. Changes in the magnitude of differences of prior beliefs will lead to changes in expected wealth and hence to changes in consumption, implying instability in aggregate and individual consumption and ex post intertemporal consumption misallocations. Moreover, ‘completing markets’ through the creation of a new market for bets can increase individual and aggregate risk. With a utilitarian social welfare function, completing markets leads to lower welfare ex post, but the first theorem of welfare economics (evaluating each individual's well-being on the basis of her ex ante beliefs) still holds, raising unsettling questions for welfare analysis. We also show that if the planner uses beliefs that are consistent, then the betting equilibrium would be Pareto inferior.

中文翻译：

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伪财富与消费波动

摘要

本文对描述经济的基本状态变量未发生变化但总消费发生重大变化的情况进行了解释。我们提出了一种假财富理论，即个人的感知财富，该财富源于对异类期望产生的下注收益的期望。这些财富与社会的实际资产脱节了。建立投注市场必然会产生积极的假财富。先前信念差异幅度的变化将导致预期财富的变化，进而导致消费的变化，这意味着总量和个人消费以及事后的不稳定跨期消费分配不均。此外，通过建立新的投注市场来“完善市场”可能会增加个人和整体风险。具有功利主义的社会福利功能，完善市场会导致事后福利降低，但福利经济学的第一个定理（根据每个人的事前信念评估每个人的幸福）仍然成立，为福利分析提出了令人不安的问题。我们还表明，如果计划者使用一致的信念，那么博弈均衡将是帕累托劣等的。