Interregional Risk Sharing and Fiscal Redistribution in Reunified Germany

Arbeitspapier

This paper provides empirical evidence of interregional risk sharing in reunified Germany. The focus is on two related questions: First, to what extent do private institutions and the public sector provide insurance against asymmetric shocks to individual regions? Second, to what extent does the public sector reduce long-term di¤erences between regions? While the federal government channel is not found to have a stabilizing e¤ect, private factor income flows provide almost complete insurance against short-term shocks. In sharp contrast, the fiscal transfer system achieves a substantial reduction of long-term disparities between regions. These results show that fiscal transfers in reunified Germany are mainly concerned with redistribution in favor of depressed regions rather than providing insurance against idiosyncratic shocks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Technical Report ; No. 2006,40

Classification and Topics

• Classification: Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
• Subject: interregional risk sharing ; fiscal redistribution ; distribution dynamics ; regional disparities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jüßen, Falko
• Event: Veröffentlichung
• (who): Universität Dortmund, Sonderforschungsbereich 475 - Komplexitätsreduktion in Multivariaten Datenstrukturen
• (where): Dortmund
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/22684
• Last update: 10.03.2025, 11:42 AM CET