IDEAS home Printed from https://ideas.repec.org/a/rpo/ripoec/v95y2005i3p219-266.html
   My bibliography  Save this article

Risk Sharing, avversione al rischio e stabilizzazione delle economie regionali in Italia

Author

Listed:
  • Attilio Gardini

    () (Università di Bologna)

  • Giuseppe Cavaliere

    () (Università di Bologna)

  • Luca Fanelli

    () (Università di Bologna)

Abstract

We investigate the extent of risk sharing among the Italian regions with respect to both longrun and short-run income fluctuations. We use Vector Equilibrium Correction Models (VEqCMs) with the aim of testing all implications of the theory without preliminar data filtering, and without imposing constraints on the homogeneity of preferences across regions. Our estimates over the 1960-1995 period show that preferences are not homogeneous across regions and that the evidence in favour of regional risk sharing is more pronounced than commonly emphasized in previous research, although for some regions a high degree of risk aversion restricts the full effectiveness of the stabilisation strategies.

Suggested Citation

  • Attilio Gardini & Giuseppe Cavaliere & Luca Fanelli, 2005. "Risk Sharing, avversione al rischio e stabilizzazione delle economie regionali in Italia," Rivista di Politica Economica, SIPI Spa, vol. 95(3), pages 219-266, May-June.
  • Handle: RePEc:rpo:ripoec:v:95:y:2005:i:3:p:219-266
    as

    Download full text from publisher

    File URL: http://www.rivistapoliticaeconomica.it/2005/mag-giu/gardini.php
    Download Restriction: Payment required

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pamela Labadie, 1998. "Aggregate fluctuations, financial constraints and risk sharing," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(3), pages 621-648.
    2. Paci, Raffaele & Pigliaru, Francesco, 1997. "Structural change and convergence: an Italian regional perspective," Structural Change and Economic Dynamics, Elsevier, vol. 8(3), pages 297-318, August.
    3. Baxter, Marianne & Crucini, Mario J, 1995. "Business Cycles and the Asset Structure of Foreign Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 821-854, November.
    4. Drèze,Jacques, 1993. "Underemployment Equilibria," Cambridge Books, Cambridge University Press, number 9780521435246, March.
    5. Marrinan, Jane, 1998. "Government consumption and private consumption correlations," Journal of International Money and Finance, Elsevier, vol. 17(4), pages 615-636, August.
    6. Obstfeld, Maurice, 1994. "Evaluating risky consumption paths: The role of intertemporal substitutability," European Economic Review, Elsevier, vol. 38(7), pages 1471-1486, August.
    7. van Dalen, Hendrik P., 1999. "Intertemporal substitution in public and private consumption -- long-run evidence from the US and the UK," Economic Modelling, Elsevier, vol. 16(3), pages 355-370, August.
    8. 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.
    9. van Wincoop, Eric, 1995. "Regional risksharing," European Economic Review, Elsevier, vol. 39(8), pages 1545-1567, October.
    10. Olivier Jean Blanchard & Stanley Fischer, 1989. "Editorial in "NBER Macroeconomics Annual 1989, Volume 4"," NBER Chapters,in: NBER Macroeconomics Annual 1989, Volume 4, pages 1-8 National Bureau of Economic Research, Inc.
    11. Bruno Jullien & Bernard Salanie, 2000. "Estimating Preferences under Risk: The Case of Racetrack Bettors," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 503-530, June.
    12. Kocherlakota, Narayana R., 1990. "On the 'discount' factor in growth economies," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 43-47, January.
    13. repec:spo:wpecon:info:hdl:2441/765 is not listed on IDEAS
    14. Canova, Fabio & Ravn, Morten O, 1996. "International Consumption Risk Sharing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 573-601, August.
    15. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-591, May.
    16. Ogaki, Masao & Zhang, Qiang, 2001. "Decreasing Relative Risk Aversion and Tests of Risk Sharing," Econometrica, Econometric Society, vol. 69(2), pages 515-526, March.
    17. 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.
    18. Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001. "Institutional Rules for Federations," NBER Working Papers 8646, National Bureau of Economic Research, Inc.
    19. 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.
    20. Barro, Robert J. & Lee, Jong-Wha, 1994. "Sources of economic growth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 1-46, June.
    21. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    22. Stefano G. Athanasoulis & Eric van Wincoop, 2001. "Risk Sharing Within The United States: What Do Financial Markets And Fiscal Federalism Accomplish?," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 688-698, November.
    23. Decressin, Jorg, 2002. "Regional income redistribution and risk sharing: how does Italy compare in Europe?," Journal of Public Economics, Elsevier, vol. 86(2), pages 287-306, November.
    24. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    25. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    26. Roberto Cellini & Antonello E. Scorcu, 2002. "Ripartizione del rischio nelle aree territoriali italiane: un’indagine nel lungo e nel breve periodo," Rivista di Politica Economica, SIPI Spa, vol. 92(3), pages 171-200, May-June.
    27. Trostel, Philip A & Taylor, Grant A, 2001. "A Theory of Time Preference," Economic Inquiry, Western Economic Association International, vol. 39(3), pages 379-395, July.
    28. Mace, Barbara J, 1991. "Full Insurance in the Presence of Aggregate Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 928-956, October.
    29. Kraay, Aart & Ventura, Jaume, 2002. "Trade integration and risk sharing," European Economic Review, Elsevier, vol. 46(6), pages 1023-1048, June.
    30. Persson, Torsten & Tabellini, Guido, 1996. "Federal Fiscal Constitutions: Risk Sharing and Moral Hazard," Econometrica, Econometric Society, vol. 64(3), pages 623-646, May.
    31. Rolf Larsson & Johan Lyhagen & Mickael Lothgren, 2001. "Likelihood-based cointegration tests in heterogeneous panels," Econometrics Journal, Royal Economic Society, vol. 4(1), pages 1-41.
    32. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    33. Maurice Obstfeld., 1993. "Are Industrial-Country Consumption Risks Globally Diversified?," Center for International and Development Economics Research (CIDER) Working Papers C93-014, University of California at Berkeley.
    34. Antonello Scorcu, 1998. "Consumption risk-sharing in Italy," Applied Economics, Taylor & Francis Journals, vol. 30(3), pages 407-414.
    35. Raffaele Paci & Francesco Pigliaru, 1999. "Growth and sectoral dynamics in the Italian regions," Chapters,in: Economic Growth and Change, chapter 12 Edward Elgar Publishing.
    36. Jonathan Thomas & Tim Worrall, 1988. "Self-Enforcing Wage Contracts," Review of Economic Studies, Oxford University Press, vol. 55(4), pages 541-554.
    37. Loewy, Michael B. & Papell, David H., 1996. "Are U.S. regional incomes converging? Some further evidence," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 587-598, December.
    38. Athanasoulis, Stefano G. & van Wincoop, Eric, 2000. "Growth uncertainty and risksharing," Journal of Monetary Economics, Elsevier, vol. 45(3), pages 477-505, June.
    39. M. Hashem Pesaran & Yongcheol Shin, 2002. "Long-Run Structural Modelling," Econometric Reviews, Taylor & Francis Journals, vol. 21(1), pages 49-87.
    40. Luca Dedola & Stefano Usai & Marco Vannini, 1999. "An assessment of regional risk sharing in Italy and the United Kingdom," Chapters,in: Economic Growth and Change, chapter 15 Edward Elgar Publishing.
    41. Giuseppe Cavaliere & Luca Fanelli & Attilio Gardini, 2009. "Consumption risk sharing and adjustment costs," Economics Bulletin, AccessEcon, vol. 29(2), pages 1117-1126.
    42. Olivier J. Blanchard & Stanley Fischer, 1989. "NBER Macroeconomics Annual 1989, Volume 4," NBER Books, National Bureau of Economic Research, Inc, number blan89-1, April.
    43. Karen K. Lewis, 1998. "International Home Bias in International Finance and Business Cycles," NBER Working Papers 6351, National Bureau of Economic Research, Inc.
    44. Hendry, David F., 1995. "Dynamic Econometrics," OUP Catalogue, Oxford University Press, number 9780198283164.
    45. 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.
    46. repec:sbe:breart:v:20:y:2000:i:2:a:2758 is not listed on IDEAS
    47. Attanasio, Orazio & Rios-Rull, Jose-Victor, 2000. "Consumption smoothing in island economies: Can public insurance reduce welfare?," European Economic Review, Elsevier, vol. 44(7), pages 1225-1258, June.
    48. 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.
    49. Wincoop, Eric van, 1994. "Welfare gains from international risksharing," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 175-200, October.
    50. Mario J Crucini & Gregory D Hess, 1999. "International and Intranational Risk Sharing," CESifo Working Paper Series 227, CESifo Group Munich.
    51. Persson, Torsten & Tabellini, Guido, 1996. "Federal Fiscal Constitutions: Risk Sharing and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 979-1009, October.
    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. Cavaliere, Giuseppe & Fanelli, Luca & Gardini, Attilio, 2006. "Regional consumption dynamics and risk sharing in Italy," International Review of Economics & Finance, Elsevier, vol. 15(4), pages 525-542.
    2. Asdrubali, Pierfederico & Tedeschi, Simone & Ventura, Luigi, 2015. "Household Risksharing Channels," MPRA Paper 65906, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - 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:rpo:ripoec:v:95:y:2005:i:3:p:219-266. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Marino). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.