Public Employment and Regional Risk Sharing: Norway 1977-90
Research report
Permanent lenke
http://hdl.handle.net/11250/267191Utgivelsesdato
2002Metadata
Vis full innførselSamlinger
Sammendrag
We provide an empirical analysis of regional risk sharing in Norway over the period 1977-90. The approach of Asdrubali, Sørensen and Yosha (1996) is extended to take account of public employment as a possible shock absorber. The other channels of risk sharing are capital markets & commuting, taxes & transfers and credit markets. Surprisingly, there seems to be full interregional risk sharing in the short run, with public employment absorbing about 20 % of regional shocks to private output. The combined e.ect of capital markets & commuting is even more important, however, absorbing up to 70 % of regional shocks. In the longer run, a significant fraction of regional shocks remain unsmoothed. Government smoothing increases and market based smoothing decreases as shocks become more permanent.