The issue of international risk-sharing in monetary unions has been widely investigated in economic literature. Yet, the understanding of how risk-sharing channels operate is still limited. In a recent paper, Luca Rossi argues that in the U.S, income smoothing capability of inter-state capital income flows is smaller than previously estimated, while the federal fiscal channel hedges more than existing literature suggest. What does this mean for the impact of a centralised fiscal response to shock? What does it mean for the EU? And what should we expect as fallout from the COVID-19 shock and its unprecedented policy response in the EU and the US?
We will address these questions and more in this webinar, jointly organized by CEPS and the Directorate General for Economic and Financial Affairs of the European Commission.