New model allows fair risk-sharing without long-term commitment or transfers.
The article explores how people can share risks efficiently when they have different levels of productivity. They focus on using capital as the main resource and show that individuals can be matched with the right amount of capital to ensure fair lifetime benefits. Unlike other models, this approach doesn't require long-term commitments and doesn't involve constant money transfers between people. In this model, everyone can experience growth in their consumption levels, even if there are differences in productivity.