International Risk Sharing And The Irish Economy
This paper studies international risk sharing in Ireland focusing on the 1970-2007 period. To this end, the authors assess how consumption and national income have been affected by idiosyncratic output shocks. The study of the former shows that private consumption was partially insulated from output shocks and that risk sharing was invariant over time. The analysis of national income provides further evidence for international risk sharing. Here, they find that national income fluctuations were not fully affected by output shocks and that income risk sharing improved as Ireland became more integrated with the international financial system.