Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper argues the Kaldor-Hicks criterion can be a sensible criterion for judging the policy benefit in a dynamic economy if the agents can trade state-contingent securities regarding a future policy change. When the probability of the policy change is very small, ex-ante security trades can increase everyone’s consumption after the policy implementation when the Kaldor-Hicks criterion is met, even without an ex-post redistribution by the government.