International Risk Sharing During the Globalization Era - Le Partage International Du Risque Dans Une Ère De Mondialisation

23 Pages Posted: 4 May 2012

See all articles by Robert P. Flood

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

Akito Matsumoto

International Monetary Fund (IMF)

Date Written: May 2012

Abstract

Though financial globalization should improve international risk sharing, empirical support is lacking. We develop a simple welfare‐based measure that captures how far countries are from the ideal of perfect risk sharing. Applying it to data, we find some evidence that international risk sharing has 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.

Même si la mondialisation devrait améliorer le partage international du risque, on n’en a pas de confirmation empirique. Les auteurs développent une mesure simple fondée sur le niveau de bien‐être pour déterminer à quelle distance les divers pays se trouvent de l’idéal du parfait partage du risque. Grâce à cette mesure, on trouve que le partage international du risque s’est amélioré avec la mondialisation. Cette amélioration vient surtout de la convergence des taux de croissance de la consommation des divers pays plutôt que de la synchronisation de la consommation à la fréquence du cycle d’affaires.

JEL Classification: F4, D6

Suggested Citation

Flood, Robert P. and Marion, Nancy P. and Matsumoto, Akito, International Risk Sharing During the Globalization Era - Le Partage International Du Risque Dans Une Ère De Mondialisation (May 2012). Canadian Journal of Economics/Revue canadienne d'économique, Vol. 45, Issue 2, pp. 394-416, 2012, Available at SSRN: https://ssrn.com/abstract=2050790 or http://dx.doi.org/10.1111/j.1540-5982.2012.01700.x

Robert P. Flood (Contact Author)

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)

Akito Matsumoto

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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