Arbeitspapier
Optimal unemployment insurance and international risk sharing
We discuss how cross-country unemployment insurance can be used to improve international risk sharing. We use a two-country business cycle model with incomplete financial markets and frictional labor markets where the unemployment insurance scheme operates across both countries. Cross-country insurance through the unemployment insurance system can be achieved without affecting unemployment outcomes. The Ramsey-optimal policy however prescribes a more countercyclical replacement rate when international risk sharing concerns enter the unemployment insurance trade-off. We calibrate our model to Eurozone data and find that optimal stabilizing transfers through the unemployment insurance system are sizable and mainly stabilize consumption in the periphery countries, while optimal replacement rates are countercylical overall. Moreover, we find that debt-financed national policies are a poor substitute for fiscal transfers.
- ISBN
-
978-3-95729-292-6
- Sprache
-
Englisch
- Erschienen in
-
Series: Bundesbank Discussion Paper ; No. 33/2016
- Klassifikation
-
Wirtschaft
Business Fluctuations; Cycles
Fiscal Policy
Taxation and Subsidies: Efficiency; Optimal Taxation
Unemployment: Models, Duration, Incidence, and Job Search
- Thema
-
Unemployment Insurance
International Business Cycles
Fiscal Union
International Risk Sharing
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Moyen, Stéphane
Stähler, Nikolai
Winkler, Fabian
- Ereignis
-
Veröffentlichung
- (wer)
-
Deutsche Bundesbank
- (wo)
-
Frankfurt a. M.
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Moyen, Stéphane
- Stähler, Nikolai
- Winkler, Fabian
- Deutsche Bundesbank
Entstanden
- 2016
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