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The Impact of the EMU on Channels of Risk Sharing between Member Countries

In: Proceedings of the Conference on Human and Economic Resources

  • Faruk Balli

    (Houston University)

  • Bent E. Sørensen

    (Houston University)

We estimate the amount of income and consumption smoothing (risk sharing) between countries in the European Monetary Union (EMU) and between other developed countries during the period 1970–2003. In particular, we examine if EMU countries display different patterns of risk sharing than other developed countries in the period leading up to and following the formation of the EMU in 1999. We find that income smoothing from international factor income has increased in the EMU since the introduction of the EMU and that consumption smoothing from procyclical government saving has declined steeply in the EMU since the signing of the Maastricht treaty.

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This chapter was published in:
  • Oguz Esen & Ayla Ogus (ed.), 2006. "Proceedings of the International Conference on Human and Economic Resources," Proceedings of the IUE-SUNY Cortland Conference in Economics, Izmir University of Economics, number 2006, October.
  • This item is provided by Izmir University of Economics in its series Papers of the Annual IUE-SUNY Cortland Conference in Economics with number 200633.
    Handle: RePEc:izm:prcdng:200633
    Contact details of provider: Fax: (90) 232 279 2626
    Web page: http://eco.ieu.edu.tr

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