In this paper, first, we measure the potential welfare gains from perfect risk sharing across Australian states and New Zealand regions under a possible unification. We show that New Zealand regions reap moderate gains from perfect risk sharing when they form a union with Australia, whereas for...

Applying the variance decomposition developed by Asdrubali et al. (1996), the paper explores for the first time the role and the extent of smoothing channels at a micro level using a sample of UK households. Our empirical analysis of British Household Panel Survey (BHPS) data concludes that the...