The channels of consumption risk-sharing in Korea

This study investigates intranational risk-sharing behaviour in Korea's 16 province-level regions over the period 2001-2017. Korea's degree of intranational risk-sharing is at an almost perfect level. However, the extent of risk-sharing declines in the period following the subprime crisis. We also find that risk-sharing through the factor markets works well for metropolitan cities while the degree of risk-sharing is much higher for provinces through the fiscal channel and the credit markets.