Type
Working paper
Title
Interregional and International Risk Sharing and Lessons for EMU
In
CEPR Discussion paper
Author(s)
MÉLITZ Jacques - School of Management & Languages (Author)
ZUMER Frédéric - Laboratoire de recherche en sciences de gestion Panthéon-Assas (LARGEPA) (Author)
Collection
CEPR Discussion paper : n°2154
Keywords
EMU, Fiscal federalism, Risk sharing, Insurance and credit
Abstract
EN
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.

BIBLIOGRAPHIC QUOTE
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