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The Sharing of Macroeconomic Risk: Who Loses (and Gains) from Macroeconomic Shocks


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  • Rudiger Ahrend
  • Jens Arnold
  • Charlotte Moeser


This paper addresses the often neglected question of how macroeconomic risk is shared across and within economies, and identifies reforms that could contribute towards achieving more desirable risksharing outcomes. For risk-sharing across countries, the paper discusses possibilities for international insurance as well as shock-spreading and risk-mitigating policies. Within countries, it assesses the possibilities for individuals to protect their wealth, labour and capital income against various forms of macroeconomic risk and discusses the desirable boundaries between private and government-sponsored risk-sharing institutions. The paper then presents new empirical and model-based evidence about how the short-term impact of selected macroeconomic shocks (including financial crises) is shared across different groups of agents, and analyses how such distributional effects are shaped by differences in institutions. For example, individuals on low incomes, and especially young people, seem in general to lose most from adverse macroeconomic shocks. Also, it appears that across countries two broad types of institutions can be identified that facilitate risk sharing between high and low income earners, namely “social protection” and “reallocation-facilitating” institutions. Based on countries’ reliance on these types of institutions, four broad “models” of risk sharing are identified across the OECD and the BRIICS. Le partage du risque macroéconomique : Les perdants (et gagnants) des chocs macroéconomiques L’article analyse comment les risques macroéconomiques sont répartis au niveau international et individuel. Il propose des réformes qui pourraient contribuer à une meilleure redistribution de ces risques. Premièrement, au niveau international, le papier analyse l’opportunité des dispositifs d’assurance ainsi que des politiques de partage et de réduction des risques macroéconomiques. Deuxièmement, au niveau individuel, l’article évalue comment les individus peuvent protéger leurs patrimoines et revenus du travail et du capital à l’encontre de différents chocs macroéconomiques. Il analyse les limites et rôles souhaitables des dispositifs privés et publics de répartition des risques. Enfin, l’article modélise les effets de court terme de certains chocs macroéconomiques – dont les crises financières – sur différents groupes d’individus et propose une nouvelle analyse empirique de l’impact des institutions sur la répartition des risques macroéconomiques. Les bas revenus, et en particulier les jeunes, semblent les groupes les plus affectés par les chocs macroéconomiques. Les institutions de protection sociale et elles favorisant les transitions apparaissent contribuer à la redistribution des risques entre niveau de revenus. Cette analyse permet d’identifier quatre grands modèles de répartition des risques parmi les pays de l’OCDE et du BRIICS.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 877.

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Date of creation: 01 Jul 2011
Date of revision:
Handle: RePEc:oec:ecoaaa:877-en

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Keywords: redistribution; institutions; wealth; insurance; income; DSGE; macroeconomic shock; risk sharing; financial crises; chocs macroéconomiques; redistribution; répartition des risques; modèle d’équilibre général à dynamique stochastique; assurance; institutions; revenus;

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Cited by:
  1. SOLOGON Denisa & O?DONOGHUE Cathal, 2012. "Shaping earnings instability: labour market policy and institutional factors," CEPS/INSTEAD Working Paper Series 2012-06, CEPS/INSTEAD.
  2. Manos Matsaganis & Chrysa Leventi, 2014. "Distributive Effects of the Crisis and Austerity in Seven EU Countries," ImPRovE Working Papers 14/04, Herman Deleeck Centre for Social Policy, University of Antwerp.
  3. Douglas Sutherland & Peter Hoeller, 2014. "Growth Policies and Macroeconomic Stability," OECD Economic Policy Papers 8, OECD Publishing.


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