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Decomposing the Income Insurance Channel across OECD and Emerging Markets
Author(s) -
Balli Faruk,
Balli Hatice Ozer,
Jean Louis Rosmy
Publication year - 2011
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/j.1468-2443.2011.01141.x
Subject(s) - emerging markets , payment , asset (computer security) , business , liability , monetary economics , economics , finance , computer security , computer science
This paper investigates the underlying forces driving income insurance channels for the O rganisation for E conomic C o‐operation and D evelopment ( OECD ) and emerging markets. We find income insurance channels across countries to be driven by different subchannels. For the OECD , income insurance is mostly governed by payments for financial liabilities; for the emerging markets, income flows from nationals working abroad constitute the main income smoother. Despite the growth in cross‐border financial asset trading over the years, we could not find evidence of income smoothing via foreign assets receipts for the OECD . For the majority of emerging markets, neither receipts of foreign assets nor foreign liability payments are strong enough to insure income as well.