Assessing the Degree of International Consumption Risk Sharing

This paper examines the extent of consumption risk sharing for a group of 50 high-income and developing countries. The analysis is based on the empirical implementation of a model of partial consumption insurance whose parameters have the natural i...

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Main Authors: Hevia, Constantino, Serven, Luis
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2016
Subjects:
Online Access:http://documents.worldbank.org/curated/en/2016/10/26875134/assessing-degree-international-consumption-risk-sharing
http://hdl.handle.net/10986/25312
id okr-10986-25312
recordtype oai_dc
spelling okr-10986-253122021-06-14T10:16:43Z Assessing the Degree of International Consumption Risk Sharing Hevia, Constantino Serven, Luis insurance risk management risk sharing consumption risk financial globalization foreign assets foreign debt This paper examines the extent of consumption risk sharing for a group of 50 high-income and developing countries. The analysis is based on the empirical implementation of a model of partial consumption insurance whose parameters have the natural interpretation of coefficients of partial risk sharing even when the 0 hypothesis of perfect risk sharing is rejected. The estimation results show that high-income countries exhibit higher degrees of risk sharing than developing countries, and that the gap between the two country groups appears to have widened over the period of financial globalization. Moreover, the pattern of consumption risk sharing is related to the degree of financial openness: countries with more open capital accounts, and larger stocks of foreign assets and liabilities exhibit larger degrees of risk sharing. Yet, larger countries in terms of gross domestic product show lower degrees of consumption risk sharing. 2016-11-01T18:50:48Z 2016-11-01T18:50:48Z 2016-10 Working Paper http://documents.worldbank.org/curated/en/2016/10/26875134/assessing-degree-international-consumption-risk-sharing http://hdl.handle.net/10986/25312 English en_US Policy Research Working Paper;No. 7867 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic insurance
risk management
risk sharing
consumption risk
financial globalization
foreign assets
foreign debt
spellingShingle insurance
risk management
risk sharing
consumption risk
financial globalization
foreign assets
foreign debt
Hevia, Constantino
Serven, Luis
Assessing the Degree of International Consumption Risk Sharing
relation Policy Research Working Paper;No. 7867
description This paper examines the extent of consumption risk sharing for a group of 50 high-income and developing countries. The analysis is based on the empirical implementation of a model of partial consumption insurance whose parameters have the natural interpretation of coefficients of partial risk sharing even when the 0 hypothesis of perfect risk sharing is rejected. The estimation results show that high-income countries exhibit higher degrees of risk sharing than developing countries, and that the gap between the two country groups appears to have widened over the period of financial globalization. Moreover, the pattern of consumption risk sharing is related to the degree of financial openness: countries with more open capital accounts, and larger stocks of foreign assets and liabilities exhibit larger degrees of risk sharing. Yet, larger countries in terms of gross domestic product show lower degrees of consumption risk sharing.
format Working Paper
author Hevia, Constantino
Serven, Luis
author_facet Hevia, Constantino
Serven, Luis
author_sort Hevia, Constantino
title Assessing the Degree of International Consumption Risk Sharing
title_short Assessing the Degree of International Consumption Risk Sharing
title_full Assessing the Degree of International Consumption Risk Sharing
title_fullStr Assessing the Degree of International Consumption Risk Sharing
title_full_unstemmed Assessing the Degree of International Consumption Risk Sharing
title_sort assessing the degree of international consumption risk sharing
publisher World Bank, Washington, DC
publishDate 2016
url http://documents.worldbank.org/curated/en/2016/10/26875134/assessing-degree-international-consumption-risk-sharing
http://hdl.handle.net/10986/25312
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