Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75840
Authors: 
Eijffinger, Sylvester
Wagner, Wolf
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 472
Abstract: 
We argue that since there are several impediments to international risk sharing, the welfare gains from full international risk sharing, which have been the object of analysis in the previous literature, are not suggestive. Instead, we study the gains from feasible risk sharing and find that they are considerable (0:5% increase inpermanent consumption). Marginal benefits from further risk sharing are low, which indicates that feasible risk sharing can achieve most of the benefits from internationalrisk sharing. Surprisingly, we find that sharing short term consumption risk lowers welfare. On the basis of the results we make suggestions on how to improve existing international risk sharing systems.
Subjects: 
International risk sharing
welfare gains
JEL: 
F40
G15
Document Type: 
Working Paper

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