Balli, Faruk and Basher, Syed Abul and Jean Louis, Rosmy (2011): Channels of risk-sharing among Canadian provinces: 1961--2006.
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This paper incorporates recent developments in the literature to quantify the amount of interprovincial risk-sharing in Canada. We find that 29% of shocks to gross provincial product are smoothed by capital markets, 27% are smoothed by the federal tax-transfer systems, and about 24% are smoothed by credit markets. The remaining 20% are not smoothed. Our results bring to light the critical role that Alberta plays in trading-off credit market smoothing for more capital market risk-sharing with the rest of Canada. Our pairwise risk-sharing analysis has brought up some interesting questions and arguments that are often neglected in discussions of regional risk-sharing. For example, one aspect of the pairwise analysis sheds light on the assessment of the economic effects of Quebec separation.
|Item Type:||MPRA Paper|
|Original Title:||Channels of risk-sharing among Canadian provinces: 1961--2006|
|Keywords:||Risk-sharing; pairwise risk-sharing; federal taxes and transfer; panel data; cross-sectional dependence.|
|Subjects:||H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H77 - Intergovernmental Relations; Federalism; Secession
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C33 - Models with Panel Data; Longitudinal Data; Spatial Time Series
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E21 - Consumption; Saving; Wealth
F - International Economics > F3 - International Finance > F36 - Financial Aspects of Economic Integration
|Depositing User:||Syed Basher|
|Date Deposited:||12. May 2011 03:27|
|Last Modified:||15. Feb 2013 19:56|
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