Risk Sharing Opportunities and Macroeconomic Factors in Latin American and Caribbean Countries : A Consumption Insurance Assessment

Ventura, Luigi

World Bank, Washington, DC

关键词: ACCOUNTING;    AGGREGATE COMPONENT;    AGGREGATE CONSUMPTION;    AGGREGATE GROWTH;    AGGREGATE INCOME;   

DOI  :  10.1596/1813-9450-4490
RP-ID  :  WPS4490

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper evaluates the degree ofconsumption insurance enjoyed by Latin American andCaribbean countries, with respect to various referenceareas, by estimating a parameter expressing the sensitivityof a country's consumption growth to a measure ofidiosyncratic shocks to income. The paper surveys commoneconometric implementations of "consumption insurancetests." The author proposes some econometric proceduresin order to detect the actual presence of international risksharing, as well as to assess the relative impact ofidiosyncratic versus aggregate shocks. The evidence suggeststhat Latin American and Caribbean economies have been hit bynon-diversifiable income shocks, that idiosyncratic risk isrelatively more important than aggregate risk, and that somecountries in the region appear to enjoy a certain amount ofinternational risk diversification. The paper alsoidentifies some macroeconomic factors that may beresponsible for a higher or lower degree of risk pooling(such as international openness, financial depth, and creditavailability). The findings show that the financialdevelopment of an economy is a crucial factor in determiningthe amount of risk sharing opportunities, as well as publicexpenditure. The preliminary results also suggest that tradeopenness and shocks to terms of trade play an important rolein determining the degree of insurability of such risks.