Channels of risk-sharing among Canadian provinces: 1961–2006
AbstractThis article incorporates recent developments in the literature to quantify the amount of interprovincial risk-sharing in Canada. We find that 29% of shocks to gross provincial product are smoothed by capital markets, 27% are smoothed by the federal tax-transfer systems, and about 24% are smoothed by credit markets. The remaining 20% are not smoothed. Our results bring to light the critical role that Alberta plays in trading-off credit market smoothing for more capital market risk-sharing with the rest of Canada. Our pairwise risk-sharing analysis has brought up some interesting questions and arguments that are often neglected in discussions of regional risk-sharing. For example, one aspect of the pairwise analysis sheds light on the assessment of the economic effects of Quebec separation. Copyright Springer-Verlag 2012
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Bibliographic InfoArticle provided by Springer in its journal Empirical Economics.
Volume (Year): 43 (2012)
Issue (Month): 2 (October)
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Other versions of this item:
- Balli, Faruk & Basher, Syed Abul & Jean Louis, Rosmy, 2011. "Channels of risk-sharing among Canadian provinces: 1961--2006," MPRA Paper 30876, University Library of Munich, Germany.
- Basher, Syed A. & Balli, Faruk & Louis, Rosmy, 2009. "Channels of risk-sharing among Canadian provinces: 1961–2006," MPRA Paper 17300, University Library of Munich, Germany.
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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