International risk sharing during the globalization era

Flood, Robert P.; Marion, Nancy Peregrim; Matsumoto, Akito

doi:10.1111/j.1540-5982.2012.01700.x

Cited by 33 publications

(23 citation statements)

References 54 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A review of recent literature can be found in Kose, Prasad, and Torrones (2007). See also Becker and Hoffman (2006); Crucini (1999); Crucini, Kose, and Otrok (2011) ;Flood, Marion, and Matsumoto (2009).…”

mentioning

confidence: 99%

International risk‐sharing in the short run and in the long run

Baxter¹

2012

Canadian J of Economics

View full text Add to dashboard Cite

International risk‐sharing has far‐reaching implications both for economic policy and for basic research in economics. When countries do not share consumption risk, individuals experience consumption fluctuations that are undesirable and possibly unnecessary. We investigate bilateral risk‐sharing at short vs. long horizons. We find substantial cross‐country consumption correlations at trend and business‐cycle frequencies. Correlations are particularly high within Europe. Prior research focused on first‐difference correlations, which are typically quite low. We argue that this reflects measurement error. At all horizons, we find that consumption correlations are not significantly different from output correlations, implying a lack of deliberate consumption risk‐sharing.

show abstract

mentioning

confidence: 99%

International risk‐sharing in the short run and in the long run

Baxter¹

2012

Canadian J of Economics

View full text Add to dashboard Cite

show abstract

“…26 While such international risk-spreading mechanisms are generally desirable, they may at 26. On a somewhat related point, Flood et al (2009) provide evidence that financial globalisation has improved international risk sharing, as measured by the variance of a country's share in per capita world consumption. Following this measure globalisation has led to only little improvement in risk sharing at the business-cycle frequency, but risk-sharing gains have been widespread and large at lower frequencies.…”

mentioning

confidence: 99%

The Sharing of Macroeconomic Risk

Ahrend

Arnold

Moeser

2011

OECD Economics Department Working Papers

View full text Add to dashboard Cite

JT03304774This paper addresses the often neglected question of how macroeconomic risk is shared across and within economies, and identifies reforms that could contribute towards achieving more desirable risksharing outcomes. For risk-sharing across countries, the paper discusses possibilities for international insurance as well as shock-spreading and risk-mitigating policies. Within countries, it assesses the possibilities for individuals to protect their wealth, labour and capital income against various forms of macroeconomic risk and discusses the desirable boundaries between private and government-sponsored risk-sharing institutions. The paper then presents new empirical and model-based evidence about how the short-term impact of selected macroeconomic shocks (including financial crises) is shared across different groups of agents, and analyses how such distributional effects are shaped by differences in institutions. For example, individuals on low incomes, and especially young people, seem in general to lose most from adverse macroeconomic shocks. Also, it appears that across countries two broad types of institutions can be identified that facilitate risk sharing between high and low income earners, namely "social protection" and "reallocation-facilitating" institutions. Based on countries' reliance on these types of institutions, four broad "models" of risk sharing are identified across the OECD and the BRIICS.JEL Codes: D31; D63; E60; F55; G22; H11; I38

show abstract

“…In contrast, larger holdings of FDI or bank loans are not. Flood, Marion and Matsumoto (2012) use the variance of a country's share of world consumption as a measure of consumption risk sharing. Perfect consumption risk sharing occurs when this share is constant.…”

Section: Introductionmentioning

confidence: 99%

Assessing the degree of international consumption risk sharing

Hevia

Servén

2018

Journal of Development Economics

View full text Add to dashboard Cite

This paper examines the extent of risk sharing for a group of 50 industrial and developing countries. The analysis is based on a model of partial consumption insurance whose parameters have the natural interpretation of coefficients of partial risk sharing even when the null hypothesis of perfect risk sharing is rejected. Results show that rich countries exhibit higher degrees of risk sharing than developing countries, and that the gap has widened over time. Other things equal, the degree of risk sharing is higher in smaller, more financially-open economies and in those possessing flexible exchange rate regimes.

show abstract

International risk sharing during the globalization era

Cited by 33 publications

References 54 publications

International risk‐sharing in the short run and in the long run

International risk‐sharing in the short run and in the long run

The Sharing of Macroeconomic Risk

Assessing the degree of international consumption risk sharing

Contact Info

Product

Resources

About