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Abstract

We investigate risk sharing channels across different economic sectors to quantify to what extent they contribute offsetting idiosyncratic shocks. We examine the two most relevant channels of smoothing among OECD and EU countries: the international investment income and the savings channels. We find that the households- share in net foreign asset income has a significant role in risk sharing. This surprising result is strictly related to the accumulation of households- foreign asset holdings. On the contrary, governments- cross-border holdings produce a dis-smoothing effect and this might be imputable to the holding of EU countries- assets. This outcome is reversed for the new EU countries in the post Global Financial Crisis GFC period. With regard to the savings channel, we find that governments significantly contribute to risk sharing, and more significantly after the inception of the GFC. Moreover, the dividend smoothing theory reconciles with the risk-sharing findings since corporations in particular non financial significantly smooth shocks through their savings, however their contribution to risk sharing is weak in the post-GFC era.



Item Type: MPRA Paper -

Original Title: Risk sharing among economic sectors-

Language: English-

Keywords: Risk sharing, savings, net factor income, economic sectors.-

Subjects: F - International Economics > F2 - International Factor Movements and International BusinessF - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital MovementsF - International Economics > F2 - International Factor Movements and International Business > F24 - RemittancesF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy MacroeconomicsF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission-





Autor: Faruk, Balli

Fuente: https://mpra.ub.uni-muenchen.de/72452/



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