Financial Globalization, Capital Account Liberalization and International Consumption Risk-Sharing
AbstractThis paper analyzes whether international risk-sharing has improved along the same lines as the process of financial globalization. International financial markets allow investors to efficiently diversify their risks. Agents can protect themselves against fluctuations in their incomes through trading in assets with appropriate payoff structures. However, the usual finding in the literature is that international risk-sharing is quite limited. We argue that despite the liberalization of capital accounts and the removal of various legal barriers to capital mobility, international risk-sharing still appears to be rather limited.
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Bibliographic InfoArticle provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Focus on European Economic Integration.
Volume (Year): (2005)
Issue (Month): 1 ()
Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria
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