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Has consumption risk sharing increased in Asia (and elsewhere)?


Hoffmann, Mathias (2011). Has consumption risk sharing increased in Asia (and elsewhere)? Seoul Journal of Economics, 24(4):551-574.

Abstract

What impact has financial globalization had on risk sharing? In theory, financial globalization
should improve international consumption risk sharing. While the answer to this question is of
utmost policymaking concern, results in the empirical literature are inconclusive. The paper
surveys the extant literature and tries to identify which factors influence the answer: i)
consumption risk sharing seems to have increased among industrialized countries but much less in
the emerging world. ii) The increase in risk sharing is generally found to be stronger in studies that
focus on the trends rather than purely cyclical variation in the data. iii) globalization has not only
affected consumption responses to output shocks but also the structure of these shocks themselves.
This, in turn, has affected the measurement of risk sharing. The paper examines the relevance of
these points on a sample of East Asian Economies. My results indicate that risk sharing in East Asia
has started to increase once the region had recovered from the Asian crisis.

Abstract

What impact has financial globalization had on risk sharing? In theory, financial globalization
should improve international consumption risk sharing. While the answer to this question is of
utmost policymaking concern, results in the empirical literature are inconclusive. The paper
surveys the extant literature and tries to identify which factors influence the answer: i)
consumption risk sharing seems to have increased among industrialized countries but much less in
the emerging world. ii) The increase in risk sharing is generally found to be stronger in studies that
focus on the trends rather than purely cyclical variation in the data. iii) globalization has not only
affected consumption responses to output shocks but also the structure of these shocks themselves.
This, in turn, has affected the measurement of risk sharing. The paper examines the relevance of
these points on a sample of East Asian Economies. My results indicate that risk sharing in East Asia
has started to increase once the region had recovered from the Asian crisis.

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Additional indexing

Item Type:Journal Article, not refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Date:2011
Deposited On:18 Jan 2012 13:34
Last Modified:07 Dec 2017 11:30
Publisher:Korea, Republic of
ISSN:1225-0279
Free access at:Official URL. An embargo period may apply.
Official URL:http://www.sje.ac.kr/modules/repec/forthcoming_view.html?&p=1&no=507

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