Assessing the degree of international consumption risk sharing
نویسندگان
چکیده
منابع مشابه
The Gains from International Risk-Sharing
Keith Sill is a senior economist in the Research Department of the Philadelphia Fed. Our economy has become increasingly global. We import and export more than ever before. Yet, three facts about international financial transactions, when taken together, pose a puzzle. First, financial capital moves freely across country borders, at least in the case of the developed countries. Returns on simil...
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We develop a model of informal risk-sharing in social networks, in which relationships between individuals can be used as social collateral to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements and obtain two results. (1) The degree of informal insurance is governed by the expansiveness of the network, measured by the number of connections that groups of ...
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In dynamic equilibrium trade models, the common assumption that asset markets are complete implies that correlations of consumption across countries should be quite high. In contrast, measured consumption correlations tend to be rather low. While some suggest this implies that asset market incompleteness is a fundamental feature determining international trade dynamics, this paper provides an e...
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An extensive literature has examined the potential risk-sharing gains from international diversification by focusing on models and data based upon consumption relationships across countries. These consumption-based studies have largely ignored the implications of the models for asset pricing moments, leading to counterfactual asset pricing relationships such as low equity premia, high risk free...
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ژورنال
عنوان ژورنال: Journal of Development Economics
سال: 2018
ISSN: 0304-3878
DOI: 10.1016/j.jdeveco.2018.05.011