IDEAS home Printed from https://ideas.repec.org/a/cai/reofsp/reof_074_0299.html
   My bibliography  Save this article

Partage du risque dans l'Union européenne. Expériences interrégionales et internationales

Author

Listed:
  • Frédéric Zumer
  • Jacques Mélitz

Abstract

How much risk sharing takes place between regions within countries, between countries internationally, and what are the lessons for EMU? We propose a method of assessing the smoothing of shocks regions get via insurance, credit, and the central budget. The insurance comes from the holding of claims against the output of other regions. The credit channel relates to borrowing from other regions. We test the model on US and Canadian data, and then we extend the tests to two international samples: 23 OECD members and the 15 countries in the EU. We are able to conclude that even though the surrender of monetary policy will reduce the theoretical capacity of the members of EMU to smooth shocks via public action, the change will promote smoothing of shocks via the two market channels. JEL codes : C33, E20, F20, F30.

Suggested Citation

  • Frédéric Zumer & Jacques Mélitz, 2002. "Partage du risque dans l'Union européenne. Expériences interrégionales et internationales," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 299-323.
    • Handle: RePEc:cai:reofsp:reof_074_0299
    as

    Download full text from publisher

    File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=REOF_074_0299
    Download Restriction: free
    File URL: http://www.cairn.info/revue-de-l-ofce-2002-5-page-299.htm
    Download Restriction: free
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Maurice Obstfeld and Giovanni Peri., 1998. "Regional Nonadjustment and Fiscal Policy: Lessons for EMU," Center for International and Development Economics Research (CIDER) Working Papers C98-096, University of California at Berkeley.
    2. Backus, David K & Kehoe, Patrick J & Kydland, Finn E, 1992. "International Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 745-775, August.
    3. Artis, Michael J & Zhang, W, 1997. "International Business Cycles and the ERM: Is There a European Business Cycle?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 2(1), pages 1-16, January.
    4. Xavier Sala-i-Martin & Jeffrey Sachs, 1991. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States," NBER Working Papers 3855, National Bureau of Economic Research, Inc.
    5. Andrew Atkeson & Tamim Bayoumi, 1993. "Do private capital markets insure regional risk? Evidence from the United States and Europe," Open Economies Review, Springer, vol. 4(3), pages 303-324, September.
    6. Anne Frémont & Jacques Mélitz & Frédéric Zumer, 2000. "Discrimination par le marché entre les dettes des États membres de l'UEM," Revue de l'OFCE, Programme National Persée, vol. 72(1), pages 39-69.
    7. John Y. Campbell & N. Gregory Mankiw, 1987. "Are Output Fluctuations Transitory?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 857-880.
    8. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
    9. Torres,Francisco & Giavazzi,Francesco (ed.), 1993. "Adjustment and Growth in the European Monetary Union," Cambridge Books, Cambridge University Press, number 9780521440196.
    10. Bent E. S�rensen & Oved Yosha, 1998. "International Risk Sharing and European Monetary Unification," Temi di discussione (Economic working papers) 327, Bank of Italy, Economic Research and International Relations Area.
    11. Melitz, Jacques & Zumer, Frederic, 2002. "Regional redistribution and stabilization by the center in Canada, France, the UK and the US:: A reassessment and new tests," Journal of Public Economics, Elsevier, vol. 86(2), pages 263-286, November.
    12. Canzoneri,Matthew B. & Grilli,Vittorio & Masson,Paul R. (ed.), 1992. "Establishing a Central Bank," Cambridge Books, Cambridge University Press, number 9780521420983.
    13. Melitz, Jacques & Zumer, Frederic, 1999. "Interregional and international risk-sharing and lessons for EMU," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 149-188, December.
    14. Obstfeld, Maurice, 1986. "Capital mobility in the world economy: Theory and measurement," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 24(1), pages 55-103, January.
    15. Sorensen, Bent E. & Yosha, Oved, 1998. "International risk sharing and European monetary unification," Journal of International Economics, Elsevier, vol. 45(2), pages 211-238, August.
    16. Tamim Bayoumi & Michael W. Klein, 1997. "A Provincial View of Economic Integration," IMF Staff Papers, Palgrave Macmillan, vol. 44(4), pages 534-556, December.
    17. Hess, Gregory D. & Shin, Kwanho, 1998. "Intranational business cycles in the United States," Journal of International Economics, Elsevier, vol. 44(2), pages 289-313, April.
    18. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    19. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244, Decembrie.
    20. Jean IMBS, 1998. "Fluctuations, Bilateral Trade and the Exchange Rate Regime," Cahiers de Recherches Economiques du Département d'économie 9906, Université de Lausanne, Faculté des HEC, Département d’économie, revised Nov 1998.
    21. repec:hal:spmain:info:hdl:2441/763 is not listed on IDEAS
    22. Stefano Athanasoulis & Eric Van Wincoop, 1998. "Risksharing within the United States: what have financial markets and fiscal federalism accomplished?," Research Paper 9808, Federal Reserve Bank of New York.
    23. Bayoumi, Tamim & Masson, Paul R., 1995. "Fiscal flows in the United States and Canada: Lessons for monetary union in Europe," European Economic Review, Elsevier, vol. 39(2), pages 253-274, February.
    24. Maurice Obstfeld, 1993. "Are Industrial-Country Consumption Risks Globally Diversified?," NBER Working Papers 4308, National Bureau of Economic Research, Inc.
    25. Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-976, October.
    26. Hess, Gregory D & Shin, Kwanho, 1997. "International and Intranational Business Cycles," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 13(3), pages 93-109, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick-Hervé Mbouombouo Mfossa, 2015. "GOUVERNANCE ECONOMIQUE ET STABILISATION DES CHOCS ASYMETRIQUES: Quel mécanisme pour une meilleure viabilité de la CEMAC ?," Working Papers hal-01213989, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:hal:wpspec:info:hdl:2441/762 is not listed on IDEAS
    2. repec:spo:wpecon:info:hdl:2441/762 is not listed on IDEAS
    3. repec:hal:spmain:info:hdl:2441/762 is not listed on IDEAS
    4. Melitz, Jacques & Zumer, Frederic, 1999. "Interregional and international risk-sharing and lessons for EMU," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 149-188, December.
    5. repec:hal:spmain:info:hdl:2441/765 is not listed on IDEAS
    6. repec:hal:wpspec:info:hdl:2441/765 is not listed on IDEAS
    7. repec:spo:wpecon:info:hdl:2441/765 is not listed on IDEAS
    8. Zahir Antia & Ramdane Djoudad & Pierre St-Amant, 1999. "Canada’s Exchange Rate Regime and North American Economic Integration: The Role of Risk-Sharing Mechanisms," Staff Working Papers 99-17, Bank of Canada.
    9. Kalemli-Ozcan, Sebnem & Sørensen, Bent E & Yosha, Oved, 2004. "Asymmetric Shocks and Risk Sharing in a Monetary Union: Updated Evidence and Policy Implications for Europe," CEPR Discussion Papers 4463, C.E.P.R. Discussion Papers.
    10. Lafrance, Robert & St-Amant, Pierre, 2000. "Les zones monétaires optimales," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 577-612, décembre.
    11. Balli, Faruk & Sorensen, Bent E., 2007. "Risk Sharing among OECD and EU Countries: The Role of Capital Gains, Capital Income, Transfers, and Saving," MPRA Paper 10223, University Library of Munich, Germany.
    12. Pierfederico Asdrubali & Soyoung Kim, 2008. "Incomplete Intertemporal Consumption Smoothing and Incomplete Risk Sharing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1521-1531, October.
    13. Sorensen, Bent E. & Yosha, Oved, 1998. "International risk sharing and European monetary unification," Journal of International Economics, Elsevier, vol. 45(2), pages 211-238, August.
    14. Stefano Athanasoulis & Eric Van Wincoop, 1998. "Risksharing within the United States: what have financial markets and fiscal federalism accomplished?," Research Paper 9808, Federal Reserve Bank of New York.
    15. Faruk Balli & Sebnem Kalemli‐Ozcan & Bent E. Sørensen, 2012. "Risk sharing through capital gains," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(2), pages 472-492, May.
    16. Eiji Fujii, 2017. "Government Size, Trade Openness, and Output Volatility: A Case of fully Integrated Economies," Open Economies Review, Springer, vol. 28(4), pages 661-684, September.
    17. Del Negro, Marco, 2002. "Asymmetric shocks among U.S. states," Journal of International Economics, Elsevier, vol. 56(2), pages 273-297, March.
    18. Egil Matsen & Lars-Erik Borge, 2001. "Public Employment and Regional Risk Sharing: Norway 1977-90," Working Paper Series 0802, Department of Economics, Norwegian University of Science and Technology.
    19. Asdrubali, Pierfederico & Kim, Soyoung, 2004. "Dynamic risksharing in the United States and Europe," Journal of Monetary Economics, Elsevier, vol. 51(4), pages 809-836, May.
    20. Fiorelli, Cristiana & Giannini, Massimo & Martini, Barbara, 2022. "Private and public risk sharing across Italian regions," Journal of Macroeconomics, Elsevier, vol. 74(C).
    21. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412, National Bureau of Economic Research, Inc.
    22. Balli, Faruk & Basher, Syed Abul & Balli, Hatice Ozer, 2011. "Income insurance and the determinants of income insurance via foreign asset revenues and foreign liability payments," Economic Modelling, Elsevier, vol. 28(5), pages 2296-2306, September.
    23. Ralf Hepp & Jürgen von Hagen, 2013. "Interstate risk sharing in Germany: 1970--2006," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 1-24, January.
    24. Anton Schautzer, 2005. "Albania: Country Profile and Recent Economic Developments," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 107-126.
    25. repec:zbw:bofrdp:1997_008 is not listed on IDEAS
    26. Asdrubali, Pierfederico & Kim, Soyoung, 2008. "On the empirics of international smoothing," Journal of Banking & Finance, Elsevier, vol. 32(3), pages 374-381, March.
    27. Jääskelä, Jarkko, 1997. "Incomplete insurance market and its policy implication within European Monetary Union," Research Discussion Papers 8/1997, Bank of Finland.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F30 - International Economics - - International Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:reofsp:reof_074_0299. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean-Baptiste de Vathaire (email available below). General contact details of provider: https://www.cairn.info/revue-de-l-ofce.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.