This paper analyzes whether the degree of risk-sharing in East Asia has improved along with the observed rise in integration in the region. Higher risk-sharing is expected to result in (i) higher intraregional correlation of consumption across time and relative to output, and (ii) a higher residual in the panel regression of consumption on output. The results show that risk-sharing continues to be low in Asia. The increase in cross-economy correlation in consumption coincided with an even higher cross-economy correlation in output.
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