The price of growth: Consumption insurance in China 1989-2009

Raül Santaeulàlia-Llopis, Yu Zheng

Research output: Contribution to journalArticlepeer-review


We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consumption and income data. We find that consumption insurance deteriorates along the growth process with a transmission of permanent income shocks to consumption that at least triples from 1989 to 2009. Although preliminary, our welfare analysis suggests that the loss of consumption insurance can have first-order implications for the welfare assessment of economic growth.

Original languageEnglish (US)
Pages (from-to)1-35
Number of pages35
JournalAmerican Economic Journal: Macroeconomics
Issue number4
StatePublished - Oct 1 2018

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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