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Efficiency, Insurance, and Redistribution Effects of Government Policies -- by Anmol Bhandari, David Evans, Mikhail Golosov, Thomas J. Sargent
A new academic paper by Bhandari, Evans, Golosov, and Sargent introduces a framework for decomposing the welfare effects of government policy reforms into redistribution and efficiency components. The decomposition further breaks efficiency into subcomponents including insurance against idiosyncratic and aggregate risk. The methodology uses generalized Pareto-Negishi weights and production/consumption wedges to measure distortions and is designed to be numeraire-invariant and directionally symme