Interregional and International Risk Sharing and Lessons for EMU

Jacques Melitz and Frédéric Zumer

No 2154, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: How much risk sharing takes place between regions within countries, between countries internationally, and what are the lessons for EMU? We study these questions based on regional data from the US, Canada, the UK and Italy, and national data from an international sample of 23 OECD countries, including all 15 EU members, and do so with the aid of a modified version of a model by Asdrubali, Sørensen and Yosha. In conclusion, we find that even though the surrender of monetary policy will reduce the capacity of the members of EMU to smooth shocks via macroeconomic policy, the regime will promote smoothing of shocks via market channels.

Keywords: EMU; Fiscal Federalism; Insurance and Credit; Risk Sharing (search for similar items in EconPapers)
JEL-codes: C33 E20 F20 F30 (search for similar items in EconPapers)
Date: 1999-05
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Citations: View citations in EconPapers (81)

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Related works:
Working Paper: Interregional and International Risk Sharing and Lessons for EMU (2000)
Journal Article: Interregional and international risk-sharing and lessons for EMU (1999)
Working Paper: Interregional and International Risk Sharing and Lessons for EMU (1999)
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