Capital mobility and international sharing of cyclical risk
This paper investigates whether the international globalization of financial markets allows for significant cross-country risk-sharing at the business cycle frequency. We find that cross-country risk-sharing is still limited and this is unlikely to be the result of financial frictions that limit state-contingent contracts. Part of the limited international risk sharing could be the consequence of frictions that de-facto reduce the short-term mobility of financial capital. But even with these frictions we find significant divergence between model predictions and the data.
Year of publication: |
2013
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Authors: | Bengui, Julien ; Mendoza, Enrique G. ; Quadrini, Vincenzo |
Published in: |
Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 60.2013, 1, p. 42-62
|
Publisher: |
Elsevier |
Saved in:
Online Resource
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