Interregional risk sharing and fiscal redistribution in unified Germany
AbstractThis article provides empirical evidence of interregional risk sharing in unified Germany. The focus is on two related questions. First, to what extent do private institutions and the public sector provide insurance against idiosyncratic shocks to individual regions? Second, to what extent does the public sector reduce long-term differences between regions? While the federal government channel is not found to have a stabilising effect, private capital flows provide almost complete insurance against short-term shocks. In sharp contrast, the fiscal transfer system achieves a substantial reduction of long term disparities between regions. These results show that fiscal transfers in unified Germany are mainly concerned with redistribution in favor of depressed regions rather than providing insurance against idiosyncratic shocks. Copyright (c) 2006 the author(s). Journal compilation (c) 2006 RSAI.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Papers in Regional Science.
Volume (Year): 85 (2006)
Issue (Month): 2 (06)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190
Other versions of this item:
- Jüßen, Falko, 2006. "Interregional Risk Sharing and Fiscal Redistribution in Reunified Germany," Technical Reports 2006,40, Technische Universität Dortmund, Sonderforschungsbereich 475: Komplexitätsreduktion in multivariaten Datenstrukturen.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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