Essays in banking and risk management
(cont.) Risk Management have begun implementing strategies to provide commodity price and weather insurance in the developing world. In Chapter 3 (joint with Professor Rob Townsend from the University of Chicago), we examine how shocks to the price of rubber, an important but volatile Thai export commodity, affect the income, consumption and intra-household remittances of rural Thai households. In contrast to related work on rainfall shocks, we find rubber price innovations are not well insured or smoothed--remittances, borrowing and saving play only small roles in ameliorating the effect of these shocks on the consumption of affected households. We argue that differences in the relative persistence of the two types of shocks provide a plausible reason for these divergent findings, drawing on the literature on buffer stock models of consumption behavior and risk sharing with limited commitment.
Year of publication: |
2004
|
---|---|
Authors: | Vickery, James Ian |
Other Persons: | Ricardo Caballero. (contributor) |
Institutions: | Massachusetts Institute of Technology. Dept. of Economics. (contributor) |
Publisher: |
Massachusetts Institute of Technology |
Saved in:
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