This project derives from the often-expressed concern that countries which contain regions with asymmetric business cycles or monetary unions that contain countries with asymmetric business cycles face a problem of dealing with the diversity of cyclical outcomes across the regions/countries concerned. The project looks at one means by which this problem may be handled, viz that of lending and borrowing and the cross-border/cross-national ownership of assets. Through these means consumption risk may be shared across regions or countries. Empirical evidence shows that consumption risk spreading across US regions is much higher than consumption risk-sharing across OECD countries. This work is being carried out by Michael Artis in conjunction with Mathias Hoffmann of the University of Zurich.

This project is being undertaken by the Manchester Regional Economics Centre (MREC).