In theory, one of the main benefits of financial globalization is that it should allow for more efficient international risk sharing. In this paper, we provide a comprehensive empirical evaluation of the patterns of risk sharing among different groups of countries and examine how international...

Using a multi-level factor model, we estimate a global factor and country factors using the real macroeconomic variables of 71 countries from 1970 to 2018. The global factor successfully captures economic fluctuations in the world economy and primarily comoves with the business cycles of...