Government Size and International Consumption Risk Sharing
Sprache des Titels:
We investigate the influence of government size on the exposure of consumption growth to country-specific fluctuations in output growth using a sample of OECD countries. To the extent that governments are less constrained on international financial markets, it appears conceivable that governments diversify risks internationally on behalf of agents. Our results indicate that the extent of international risk sharing is unrelated to the size of the public sector.