Faisal Rana

Doctor of Philosophy, (Economics)
Study Completed: 2014
College of Business

Citation

Thesis Title
Essays on International Risk Sharing

Read article at Massey Research Online: MRO icon

One of the most important benefits of financial integration in theory is the international risk sharing opportunity it provides by insuring income and consumption against domestic output fluctuations. Mr Faisal’s research focussed on providing a deeper understanding of the channels through which risk sharing takes place across countries. He found that remittance inflows serve as an effective channel of risk sharing by stabilizing income in developing countries. He also showed that it is possible to examine both risk sharing and intertemporal smoothing mechanisms in a single framework; besides, distinguishing and measuring the extent of different types of shocks. Motivated by the concerns that the volatility of returns affects the degree of risk sharing, Mr Faisal found that greater portfolio concentration leads to an elevation, whereas more financial integration causes a reduction in the return volatility. These findings suggest several possible ways to reap large welfare gains from risk sharing.

Supervisors
Associate Professor David Tripe
Professor Hans-Jurgen Engelbrecht
Associate Professor Faruk Balli

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