Risk Sharing in Currency Unions: The Migration Channel

Müller, Gernot, Wilhelm Kohler and Susanne Wellmann
Authors registered in the RePEc Author Service: Gernot J. Müller

No 16178, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: International risk sharing insulates consumption from country-specific business-cycle fluctuations. This matters for countries in currency unions who lack monetary autonomy. In the spirit of Mundell, we formally integrate migration as a distinct channel into the standard framework used to quantify risk sharing. Comparing the euro area and the US we find that migration contributes significantly to risk sharing across US states, but not across the euro area. We also present survey evidence showing that migration rates are about 20 times higher in the US. The overall amount of risk sharing in the US is higher by a factor of two.

Keywords: Risk sharing; Currency unions; Labour migration; Migration rates; Euro area (search for similar items in EconPapers)
JEL-codes: F22 F41 G15 J61 (search for similar items in EconPapers)
Date: 2021-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16178 (application/pdf)

Related works:
Journal Article: Risk sharing in currency unions: The migration channel (2023)
Working Paper: Risk Sharing in Currency Unions: The Migration Channel (2021)
Working Paper: Risk sharing in currency unions: The migration channel (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16178

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16178

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().