Interregional and International Risk Sharing and Lessons for Emu

CEPR Working Paper No. 2154

Posted: 23 Aug 1999

See all articles by Jacques Melitz

Jacques Melitz

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); Centre for Economic Policy Research (CEPR)

Frederic Zumer

Observatoire Français des Conjonctures Economiques (OFCE)

Date Written: May 1999

Abstract

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, Sorensen 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.

JEL Classification: C33, E20, F20, F30

Suggested Citation

Melitz, Jacques and Zumer, Frederic, Interregional and International Risk Sharing and Lessons for Emu (May 1999). CEPR Working Paper No. 2154, Available at SSRN: https://ssrn.com/abstract=176708

Jacques Melitz (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France
+331 41 17 60 46 (Phone)
+331 41 17 60 34 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Frederic Zumer

Observatoire Français des Conjonctures Economiques (OFCE) ( email )

69 Quai d'Orsay
Paris 75007
France
(33 1) 44 18 54 61 (Phone)
(33 1) 44 18 54 78 (Fax)

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