Autori
Canova, Fabio
RAVN, Morten O.

Titolo
International consumption risk sharing
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1993 - Fascicolo: 32 - Pagina iniziale: 1 - Pagina finale: 31

This paper examines whether or not consumption risk sharing occurs in a panel of industrialized countries. We theoretically derive the international consumption insurance proposition in a simple setup and show how it should be modified in more complicated models. We empirically analyze the implications of the proposition for pairs of countries over cycles of different length and find that (i) aggregate domestic consumption is completely insured against idiosyncratic real, demographic, fiscal and monetary shocks, but that it covaries with domestic variables over long or infinite cycles. Also, the cross equation restrictions imposed by the theory are, in general, rejected. The policy implications of the results are discussed.



Testo completo: http://hdl.handle.net/1814/473

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