Download or read book International Risk Sharing and Economic Growth written by Devereux, Michael and published by Kingston, Ont. : Institute for Economic Research, Queen's University. This book was released on 1991 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book International Risk Sharing and Gains from Financial Globalization written by Julian Fischer and published by GRIN Verlag. This book was released on 2017-09-04 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2017 in the subject Economics - International Economic Relations, grade: 2,0, University of Göttingen (Professur für Empirische Außenwirtschaft), course: International Financial Markets, language: English, abstract: In this paper, potential of international risk sharing for emerging markets will be investigated, particularly in terms of financial integration and liberalization. The incentives of financial integration will be surveyed in terms of international risk sharing, indicate benefits for emerging market economies. In addition, it will be investigated if huge foreign capital inflows show positive effects of risk sharing for them. Several government leaders all over the world recognize the potential of financial globalization for their country. A strong incentive for deeper financial linking can be observed. Three of the development countries in Africa already grew up to the so called emerging markets: Egypt, Morocco and South Africa. To keep up with the fast growing population and facilitating the economic growth, they want to stimulate employments for agriculture and infrastructure by investment partnerships with the G20, whereas Donald Trump, the President of the USA, would like to cut funding World Bank programs like credit guarantees or small business access to finance for these countries. Indeed, these development countries, also including emerging markets, need to implement more structural changes like liberalizing financial markets and financial transparency for these intentions. Is international risk sharing able to smooth uncertainties in the emerging markets? Will they catch up the distance to industrial countries? In light of ongoing financial integration and economic development, the influence of international risk sharing in terms of financial globalization for emerging markets will be investigated. Just little evidence of risk sharing can be seen throughout the last decades, but still some persuasive inquiries are to be considered. Improvements in international risk sharing potentially lead to stabilizing effects, scarcer sudden stops and smaller risk premiums. Structural policy changes and better financial integration could surmount the threshold effect.

Download or read book International Risk Sharing and Economic Growth written by Michael Devereux and published by . This book was released on 1991 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: International risk-sharing which diversifies away income risk will reduce saving, with constant relative risk aversion. If growth arises from the external effects of human capital accumulation then reducing saving will reduce growth. Welfare also may fall with risk-sharing, because endogenous growth with external effects of capital accumulation typically implies a competitive equilibrium growth rate already less than the optimal growth rate. We demonstrate these results in standard, representative-agent and overlapping-generations economies. In the same economies diversifying away rate-of-return risk also will reduce saving and growth rates if relative risk aversion exceeds one.

Download or read book Applying Risk Sharing Finance for Economic Development written by Putri Swastika and published by Springer Nature. This book was released on 2021-09-13 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the application of risk-sharing finance as a national economic policy in history and how it stimulated economic recovery during a short period in Germany between 1933 and 1935. Economic history indicates that risk-sharing instruments have promoted socio-economic development in many parts of the world while risk-shifting methods have imposed huge socio-economic costs on many nations, leading to debt slavery on individual members. This book highlights lessons to be learned from history and argues that risk-sharing is a powerful tool for generating rapid economic recovery and resumption of growth.

Download or read book International Risk Sharing During the Globalization Era written by Mr.Akito Matsumoto and published by International Monetary Fund. This book was released on 2009-09-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Though theory suggests financial globalization should improve international risk sharing, empirical support has been limited. We develop a simple welfare-based measure that captures how far countries are from the ideal of perfect risk sharing. We then take it to data and find international risk sharing has, indeed, improved during globalization. Improved risk sharing comes mostly from the convergence in rates of consumption growth among countries rather than from synchronization of consumption at the business cycle frequency. Our finding explains why many existing measures fail to detect improved risk sharing-they focus only on risk sharing at the business cycle frequency.

Download or read book International Risk Sharing in the Short Run and in the Long Run written by Marianne Baxter and published by . This book was released on 2011 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: International risk-sharing has far-reaching implications both for economic policy and for basic research in economics. When countries do not share risk, individuals in those countries experience fluctuations in their consumption levels that are undesirable and possibly unnecessary. This paper extends and refines the study of international risk-sharing in two dimensions. First, this paper investigates risk-sharing at short vs. long horizons. Countries might, for example, pool risks associated with high-frequency shocks (e.g., seasonal fluctuations in crop yields) but might not share risks associated with low frequency shocks (e.g., different long-run national growth rates). Second, this paper studies bilateral risk-sharing, which is different from the approach taken in most previous studies. We find that there is evidence of substantial international risk-sharing at medium and low frequencies. There is evidence of high and increasing risk-sharing within Europe that is not apparent for other regions of the world

Download or read book World Income Components written by Robert J. Shiller and published by . This book was released on 1995 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide methods of decomposing the variance of world national incomes into components in such a way as to indicate the most important risk-sharing opportunities, and, therefore, the most important missing international risk markets to establish. One method uses a total variance reduction criterion, and identifies risk-sharing opportunities in terms of eigenvectors of a variance matrix of residuals produced when country incomes are regressed on world income. Another method uses a mean-variance utility-maximizing criterion and identifies risk-sharing opportunities in terms of eigenvectors of a variance matrix of deviations of country incomes from their respective contract-year shares of world income. The two methods are applied using Summers-Heston (1991) data on national incomes for large countries 1950-1990, each using two different methods of estimating variances. While these data are not sufficient to provide accurate estimates of the requisite variance matrices of (transformed) national incomes, the results are suggestive of important new markets that could actually be created, and show that there may be large welfare gains to creating some of these markets.

Download or read book Discussion Paper 829 International Risk Sharing and Economic Growth Michael B Devereux and Gregor W Smith written by Queen's University. Institute for Economic Research and published by . This book was released on 1991 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book An Alternative Unifying Measure of Welfare Gains from Risk sharing written by Philippe Auffret and published by World Bank Publications. This book was released on 2001 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following Lucas's (1987) standard approach, welfare gains from international risk-sharing have been measured as the percentage increase in consumption levels that leaves individuals indifferent between, autarky and risk-sharing. The author proposes to measure welfare gains as the increase in consumption growth, instead of consumption levels. When the consumption process is non-stationary, the author's proposed measure has several attractive features: it does not depend on the horizon, and it is robust to alternative specifications of the consumption stochastic processes (from geometric Brownian processes, to Orstein-Ulhenbeck mean-reverting processes), and preferences (from constant relative risk aversion preferences to Kreps-Porteus preferences). The author then uses this measure to estimate potential welfare gains from international risk-sharing for a representative U.S. consumer. The author finds that if international risk-sharing leads only to a complete elimination of aggregate consumption volatility (with no impact on consumption growth), it represents gains to a U.S. consumer of only $ 12 a year on average. But if international risk-sharing also permits an increase in consumption growth, it may have a sizable impact on welfare. Each 0.5 percentage point increase in consumption growth, represents gains to a U.S. consumer of about $ 160 a year on average.

Download or read book Pooling Risk Among Countries written by Jean Imbs and published by International Monetary Fund. This book was released on 2007-06 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we identify the groups of countries where international risk-sharing opportunities are most attractive. We show that the bulk of risk-sharing gains can be achieved in groups consisting of as few as seven members, and that further marginal benefits quickly become negligible. For many such small groups, the welfare gains associated with risk sharing can amount to one order of magnitude larger than Lucas's classic calibration suggested for the United States, under similar assumptions on utility. Why do we not observe more arrangements of this type? Large welfare gains can only be achieved within groups where contracts are probably seen as relatively difficult to enforce. International diversification can thus yield substantial gains, but these may remain untapped owing to potential partners' weak institutional quality and a history of default on international obligations. Noting that existing risk sharing arrangements often have a regional dimension, we speculate that shared economic interests such as common trade may help sustain such arrangements, though risk-sharing gains are smaller when membership is constrained on a regional basis.

Download or read book Cross country Consumption Risk Sharing a Long run Perspective written by Mr.Zhaogang Qiao and published by International Monetary Fund. This book was released on 2010-03-01 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates an empirical nonstationary panel regression model that tests long-run consumption risk sharing across a sample of OECD and emerging market (EM) countries. This is in contrast to the existing literature on consumption risk sharing, which is mainly about risks at business cycle frequency. Since our methodology focuses on identifying cointegrating relationships while allowing for arbitrary short-run dynamics, we can obtain a consistent estimate of long-run risk sharing while disregarding any short-run nuisance factors. Our results show that long-run risk sharing in OECD countries increased more than that in EM countries during the past two decades.

Download or read book International Risk Sharing is Better Than You Think or Exchange Rates are Much Too Smooth written by Michael W. Brandt and published by . This book was released on 2001 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exchange rates depreciate by the difference between the domestic and foreign marginal utility growths. Exchange rates vary a lot , as much as 10% per year. However, equity premia imply that marginal utility growths vary much more, by at least 50% per year. This means that marginal utility growths must be highly correlated across countries -- international risk sharing is better than you think. Conversely, if risks really are not shared internationally, exchange rates should vary more than they do -- exchange rates are much too smooth. We calculate an index of international risk sharing that formalizes this intuition in the context of both complete and incomplete capital markets. Our results suggest that risk sharing is indeed very high across several pairs of countries.

Download or read book Wealth Inequality Asset Redistribution and Risk Sharing Islamic Finance written by Tarik Akin and published by Walter de Gruyter GmbH & Co KG. This book was released on 2019-03-04 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: Wealth inequality has been not only rising at unsustainable pace but also dissociated from income inequality because of the fact that wealth is increasing without concomitant increase in savings and productive capital. Compelling evidence indicates that capital gains and other economic rents are mainly responsible for wealth inequality and its divergence from income inequality. The main argument of the book is that interest-based debt contracts are one of the drivers of wealth inequality through creating disproportional economic rents for the asset-rich. The book also introduces the idea of risk-sharing asset-based redistribution, which is a novel and viable policy proposal, as an effective redistribution tool to address the wealth inequality problem. Furthermore, a large-scale stock-flow consistent macroeconomic model, which is step by step constructed in the book, sheds light on the formation of wealth inequality in a debt-based economy and on the prospective benefits of implementing risk-sharing asset-based redistribution policy tools compared to traditional redistribution policy options. The research presented in this book is novel in many respects and first of its kind in the Islamic economics and finance literature.

Download or read book Reaping the Benefits of Financial Globalization written by Mr.Ayhan Kose and published by International Monetary Fund. This book was released on 2008-12-16 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial globalization has increased dramatically over the past three decades, particularly for advanced economies, while emerging market and developing countries experienced more moderate increases. Divergences across countries stem from different capital control regimes, and factors such as institutional quality and domestic financial development. Although, in principle, financial globalization should enhance international risk sharing, reduce macroeconomic volatility, and foster economic growth, in practice its effects are less clear-cut. This paper envisages a gradual and orderly sequencing of external financial liberalization and complementary reforms in macroeconomic policy framework as essential components of a successful liberalization strategy.

Download or read book Islamic Finance Risk Sharing and Macroeconomic Stability written by Muhamed Zulkhibri and published by Springer. This book was released on 2019-02-20 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: The concept of risk-sharing in financial and social contracts is one of the unique features of Islamic finance. Many theoretical studies generally claim superiority of an Islamic financial system based on pure equity and participatory modes of financing, while empirical studies provide mixed results. Studies and discussions are needed to fully understand how Islamic finance could contribute to the ongoing discussion of financial stability. Against this background, this book addresses various aspects of Islamic finance and the risk-sharing mechanism contributions to the overall macroeconomic and financial stability. Undoubtedly, the findings and recommendation from this book should be of great interest not only to future academic researchers in the field of macroeconomic stability and Islamic finance, but also to policy makers and regulators who are keen on drawing lessons from Islamic finance experiences to prevent similar crisis in the future.

Download or read book Social Capital and Risk Sharing written by Abbas Mirakhor and published by Springer. This book was released on 2015-12-30 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: This exciting new addition to Palgrave Studies in Islamic Banking, Finance, and Economics argues that social capital can facilitate rule-compliance and co-operation in the sharing of risk in financial and economic activities.

Download or read book Regional Studies on Economic Growth Financial Economics and Management written by Mehmet Huseyin Bilgin and published by Springer. This book was released on 2017-04-13 with total page 450 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume presents selected papers from the 19th Eurasia Business and Economics Society (EBES) Conference held in Istanbul. Its primary emphasis is on showcasing the latest empirical research on social change, sustainable development and the management of public and private organizations in emerging economies. The respective articles also address more specialized and related topics such as financial risk tolerance, international strategic partnerships, female labor force participation, human capital dynamics, and economic integration, among others.