GROWTH UNCERTAINTY AND RISKSHARING
| dc.creator | Athanasoulis, Stefano | |
| dc.creator | van Wincoop, Eric | |
| dc.date | 2017-04-01T13:51:51Z | |
| dc.date.accessioned | 2026-07-09T03:23:30Z | |
| dc.description | How large are potential benefits from global risksharing? In order to answer this question we propose a new methodology that is closely connected with the empirical growth literature. We obtain estimates of residual risk (growth uncertainty) at various horizons from regressions of country-specific growth in deviation from world growth on a wide set of variables in the information set. Since this residual risk can be entirely hedged through risksharing, we use it to obtain a measure of the potential welfare gain for a representative country. We find that nations can reap very large benefits from engaging in such risksharing arrangements. Using post-war data, the gain for a 35-year horizon, corresponding to an equivalent permanent increase in consumption, is 6.6% when based on a set of 49 countries, and 1.5% when based on 21 OECD countries. Using historical data from 1870 to 1990, we find that the potential gain for a 120-year horizon ranges from 4.9% for a small set of rich countries to 16.5% for a broad set of 24 countries. | |
| dc.identifier | doi:10.22004/ag.econ.18194 | |
| dc.identifier | https://ageconsearch.umn.edu/record/18194/files/er41.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/18194 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/531727 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/18194 | |
| dc.title | GROWTH UNCERTAINTY AND RISKSHARING | |
| dc.type | Text |