EconPapers    
Economics at your fingertips  
 

Interstate Risk Sharing in Germany: 1970-2006

Ralf Hepp () and Juergen von Hagen ()

No 2010-13, Working papers from University of Connecticut, Department of Economics

Abstract: We study the channels of interstate risk sharing in Germany for the time period 1970 to 2006, estimating the degrees of smoothing of a shock to a state's gross domestic product by factor markets, the government sector, and credit markets, respectively. Within the government sector, we pay special attention to Germany's fiscal equalization mechanism. For pre-unification Germany, we find that about 19 percent of a shock are smoothed by private factor markets, 50 percent are smoothed by the German government sector, and a further 17 percent are smoothed through credit markets. For the post-reunification period, 1995 to 2006, the relative importance of the smoothing channels has changed. Factor markets contribute around 50.5 percent to consumption smoothing. The government sector's role is diminished: it smoothes around 10 percent of a shock. Fiscal equalization only plays a very small role for consumption smoothing in Germany.

Keywords: Regional Risk-sharing; Factor Markets; Consumption Smoothing; Fiscal Federalism (search for similar items in EconPapers)
JEL-codes: H77 E63 F42 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010
New Economics Papers: this item is included in nep-eec
Note: This paper was partially written while Ralf Hepp was visiting the University of Connecticut
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20) Track citations by RSS feed

Downloads: (external link)
https://media.economics.uconn.edu/working/2010-13.pdf Full text (application/pdf)

Related works:
Journal Article: Interstate risk sharing in Germany: 1970--2006 (2013) Downloads
Working Paper: Interstate Risk Sharing in Germany:1970-2006 (2011) Downloads
Working Paper: Interstate Risk Sharing in Germany: 1970-2006 (2010) Downloads
Working Paper: Interstate risk sharing in Germany: 1970-2006 (2010) Downloads
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:uct:uconnp:2010-13

Access Statistics for this paper

More papers in Working papers from University of Connecticut, Department of Economics University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063. Contact information at EDIRC.
Bibliographic data for series maintained by Mark McConnel ().

 
Page updated 2020-02-23
Handle: RePEc:uct:uconnp:2010-13