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National Insurance Against Unevenly Distributed Shocks in a European Monetary Union

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  • Melitz, Jacques
  • Vori, Silvia

Abstract

We examine proposals to introduce in the European Community national insurance against unevenly distributed shocks. This would operate differently from tax and government spending activities that now yield regional insurance within countries, since the latter are mainly designed for other purposes such as income redistribution and general revenue-raising. According to our evidence, the appeal of such insurance is very limited because the risks are too highly correlated and there is an excessive chance that a country in difficulty would not receive aid. The costs of a continuing programme are likely to exceed the benefits.

Suggested Citation

  • Melitz, Jacques & Vori, Silvia, 1992. "National Insurance Against Unevenly Distributed Shocks in a European Monetary Union," CEPR Discussion Papers 697, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:697
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    Cited by:

    1. Barry Eichengreen, 1997. "Saving Europe's Automatic Stabilisers," National Institute Economic Review, National Institute of Economic and Social Research, vol. 159(1), pages 92-98, January.
    2. Rui Henrique Alves & Óscar Afonso, 2007. "Fiscal Federalism in the European Union: How Far Are We?," FEP Working Papers 244, Universidade do Porto, Faculdade de Economia do Porto.
    3. Jacques Mélitz, 1993. "Faut-il une assurance communautaire contre des différences de conjoncture ?," Économie et Statistique, Programme National Persée, vol. 262(1), pages 101-108.
    4. Pierre-Alain Muet, 1995. "Union monétaire et fédéralisme," Revue de l'OFCE, Programme National Persée, vol. 55(1), pages 151-170.
    5. Davide Furceri & Aleksandra Zdzienicka, 2015. "The Euro Area Crisis: Need for a Supranational Fiscal Risk Sharing Mechanism?," Open Economies Review, Springer, vol. 26(4), pages 683-710, September.
    6. Charles Goodhart, 1995. "European Monetary Integration," FMG Special Papers sp73, Financial Markets Group.
    7. Dominick Salvatore, 1998. "International Monetary and Financial Arrangements: Present and Future," Open Economies Review, Springer, vol. 9(1), pages 375-416, January.
    8. Henri Sterdyniak & Pierre Villa, 1993. "Régimes de change et coordination des politiques économiques en Europe," Revue de l'OFCE, Programme National Persée, vol. 43(1), pages 307-348.
    9. Jean Pisani-Ferry & Claude Bismut, 1993. "L'union économique et monétaire : principes et implications," Revue Économique, Programme National Persée, vol. 44(1), pages 121-142.
    10. Tesar, Linda L., 1995. "Evaluating the gains from international risksharing," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 95-143, June.
    11. Frédéric Zumer, 1998. "Stabilisation et redistribution budgétaires entre régions : Etat centralisé, Etat fédéral," Sciences Po publications info:hdl:2441/766, Sciences Po.
    12. Marc-Alexandre Sénégas, 2010. "La théorie des zones monétaires optimales au regard de l'euro : Quels enseignements après dix années d'union économique et monétaire en Europe ?," Revue d'économie politique, Dalloz, vol. 120(2), pages 379-419.
    13. 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.
    14. Sanguinetti, Pablo & Tommasi, Mariano, 2004. "Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline," Journal of International Economics, Elsevier, vol. 62(1), pages 149-170, January.
    15. Enzo Dia, 2004. "The bank’s risk insurance and the EMU," Working Papers 72, University of Milano-Bicocca, Department of Economics, revised May 2004.
    16. Frédéric Zumer, 1998. "Stabilisation et redistribution budgétaires entre régions : État centralisé, État fédéral," Revue de l'OFCE, Programme National Persée, vol. 65(1), pages 243-289.

    More about this item

    Keywords

    European Monetary Union; Fiscal Federalism; Regional Insurance;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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