Abstract

http://ssrn.com/abstract=1486527
 
 

Citations (5)



 


 



International Risk Sharing During the Globalization Era


Akito Matsumoto


International Monetary Fund (IMF)

Robert P. Flood


International Monetary Fund (IMF) - Research Department; CENTRUM Business School; National Bureau of Economic Research (NBER)

Nancy Peregrim Marion


Dartmouth College - Department of Economics

September 2009

IMF Working Paper No. 09/209

Abstract:     
Though theory suggests financial globalization should improve international risk sharing, empirical support has been limited. We develop a simple welfare-based measure that captures how far countries are from the ideal of perfect risk sharing. We then take it to data and find international risk sharing has, indeed, improved during globalization. Improved risk sharing comes mostly from the convergence in rates of consumption growth among countries rather than from synchronization of consumption at the business cycle frequency. Our finding explains why many existing measures fail to detect improved risk sharing-they focus only on risk sharing at the business cycle frequency.

Number of Pages in PDF File: 39

Keywords: Business cycles, Consumption, Cross country analysis, Economic growth, Economic integration, Economic models, Globalization, International trade, Risk management, Welfare

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Date posted: October 13, 2009  

Suggested Citation

Matsumoto, Akito and Flood, Robert P. and Marion, Nancy Peregrim, International Risk Sharing During the Globalization Era (September 2009). IMF Working Papers, Vol. , pp. 1-38, 2009. Available at SSRN: http://ssrn.com/abstract=1486527

Contact Information

Akito Matsumoto (Contact Author)
International Monetary Fund (IMF) ( email )
700 19th Street NW
Washington, DC 20431
United States
Robert P. Flood
International Monetary Fund (IMF) - Research Department ( email )
700 19th Street NW
Washington, DC 20431
United States
202-623-7667 (Phone)
202-623-6339 (Fax)
CENTRUM Business School
Daniel Alomía Robles s/n
Los Alamos de Monterrico
Surco, Lima, Lima 00001
Peru
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Nancy P. Marion
Dartmouth College - Department of Economics ( email )
Hanover, NH 03755
United States
(603) 646-2511 (Phone)
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