Debt Crises and Risk Sharing: The Role of Markets versus Sovereigns
AbstractUsing a variance decomposition of shocks to GDP, we quantify the role of international factor income, international transfers, and saving in achieving risk sharing during the recent European crisis. We focus on the sub-periods 1990--2007, 2008--2009, and 2010 and consider separately the European countries hit by the sovereign debt crisis in 2010. We decompose risk sharing from saving into contributions from government and private saving and show that fiscal austerity programs played an important role in hindering risk sharing during the sovereign debt crisis.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9541.
Date of creation: Jul 2013
Date of revision:
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Other versions of this item:
- Sebnem Kalemli-Ozcan & Emiliano Luttini & Bent Sørensen, 2014. "Debt Crises and Risk-Sharing: The Role of Markets versus Sovereigns," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(1), pages 253-276, 01.
- Sebnem Kalemli-Ozcan & Emiliano E. Luttini & Bent Sorensen, 2014. "Debt Crises and Risk Sharing: The Role of Markets versus Sovereigns," NBER Working Papers 19914, National Bureau of Economic Research, Inc.
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- F15 - International Economics - - Trade - - - Economic Integration
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-28 (All new papers)
- NEP-EEC-2013-09-28 (European Economics)
- NEP-IAS-2013-09-28 (Insurance Economics)
- NEP-MAC-2013-09-28 (Macroeconomics)
- NEP-OPM-2013-09-28 (Open Economy Macroeconomics)
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