Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/73636 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 0914
Publisher: 
Johannes Kepler University of Linz, Department of Economics, Linz
Abstract: 
In this paper we empirically explore how characteristics of the domestic financial system influence the international allocation of consumption risk using a sample of OECD countries. Our results show that the extent of risk sharing achieved does not depend on the overall development of the domestic financial system per se. Rather, it depends on how the financial system is organized. Specifically, we find that coun- tries characterized by developed financial markets are less exposed to idiosyncratic risk, whereas the development of the banking sector contributes little to the inter- national diversification of consumption risk.
Subjects: 
International Risk Sharing
Financial Development
Financial System
JEL: 
F36
F41
Document Type: 
Working Paper

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