Does financial globalization promote risk sharing?

• 成果类型: Article; Proceedings Paper
• 署名作者: Kose, M. Ayhan; Prasad, Eswar S.; Terrones, Marco E.
• 署名单位: International Monetary Fund; Cornell University; Brookings Institution
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2008.09.001
• 发表日期: 2009
• 页码: 258-270
• 关键词: Financial globalization; Consumption risk sharing; Emerging markets

摘要

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 an empirical evaluation of the patterns of risk sharing among different groups of countries and examine how international financial integration has affected the evolution of these patterns. Using a variety of empirical techniques, we conclude that there is at best a modest degree of international risk sharing, and certainly nowhere near the levels predicted by theory. In addition, only industrial countries have attained better risk sharing outcomes during the recent period of globalization. Developing countries have, by and large, been shut out of this benefit. Even emerging market economies, many of which have reduced capital controls and all of which have witnessed large increases in cross-border capital flows, have seen little change in their ability to share risk. We find that the composition of flows may help explain why emerging markets have not been able to realize this presumed benefit of financial globalization. in particular, our results suggest that portfolio debt, which had dominated the external liability stocks of most emerging markets until recently, is not conducive to risk sharing. (C) 2008 Elsevier B.V. All rights reserved.