 Output Smoothing between Regions in SwedenNo 643, Umeå Economic Studies from Umeå University, Department of Economics Abstract: The objective of this paper is to analyze the amount of risk sharing of output that takes place between regions in Sweden. Using the approach by Asdrubali et al. (1996), further developed by Mélitz and Zumer (2002), we find that the capital market is the largest source of risk sharing of gross regional product in Sweden. Still, roughly 12 percent of a change in regional output is smoothed among the regions through the fiscal system. Taking a closer look at the fiscal component, the results suggest that national taxes play a larger role in the smoothing process than transfer payments do. There is also some evidence that there are regional differences in the sense that regions located in the south rely more on the capital market as a source of insurance against shocks in output, while the tax and transfer systems provide a larger extent of risk sharing for regions located in the north. Keywords: risk sharing; taxes; transfers; intergovernmental relations; capital market (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0643 Access Statistics for this paper More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC. |
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