Assessing the degree of international consumption risk sharing

Constantino Hevia and Luis Servén

Journal of Development Economics, 2018, vol. 134, issue C, 176-190

Abstract: 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.

Keywords: Incomplete risk sharing; Financial globalization (search for similar items in EconPapers)
JEL-codes: E21 F36 F41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Assessing the degree of international consumption risk sharing (2018)
Working Paper: Assessing the degree of international consumption risk sharing (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:134:y:2018:i:c:p:176-190

DOI: 10.1016/j.jdeveco.2018.05.011

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