Sovereign Insurance and Program Design : : What is Optimal for the Sovereign? / / Miguel Messmacher

• Record Nr.: UNINA9910826876803321
• Autore: Messmacher Miguel
• Pubbl/distr/stampa: Washington, D.C. : , : International Monetary Fund, , 2006
• ISBN: 1-4623-1248-9; 1-4527-8647-X; 1-283-51558-X; 1-4519-0860-1; 9786613828033
• Edizione: [1st ed.]
• Descrizione fisica: 1 online resource (30 p.)
• Collana: IMF Working Papers
• Soggetti: Insurance - Econometric models; Moral hazard - Econometric models; International finance - Econometric models; Actuarial Studies; Consumption; Economics; Finance; Finance: General; Financial Instruments; Financial risk management; General Financial Markets: Government Policy and Regulation; Industries: Financial Services; Institutional Investors; Insurance & actuarial studies; Insurance Companies; Insurance companies; Insurance; International Economic Order and Integration; International Lending and Debt Problems; International Monetary Arrangements and Institutions; International Policy Coordination and Transmission; Macroeconomics; Macroeconomics: Consumption; Moral hazard; Non-bank Financial Institutions; Pension Funds; Public finance & taxation; Saving; Tax incentives; Taxation; Taxation, Subsidies, and Revenue: General; Wealth
• Lingua di pubblicazione: Inglese
• Formato: Materiale a stampa
• Livello bibliografico: Monografia
• Note generali: "March 2006."
• Nota di bibliografia: Includes bibliographical references.
• Nota di contenuto: ""Contents""; ""I. INTRODUCTION""; ""II. MORAL HAZARD AND SOVEREIGN INSURANCE""; ""III. BASIC MODEL STRUCTURE AND THE ROLE OF INSURANCE""; ""IV. AN ALTRUISTIC INSURER""; ""V. DEFAULT BY THE COUNTRY""; ""VI. CONCLUSIONS""; ""VII. DERIVATION OF THE RESULTS""; ""REFERENCES""
• Sommario/riassunto: The design of the optimal sovereign insurance contract is analyzed when: the sovereign chooses the contract; effort is not contractible; shocks are of uncertain magnitude; the sovereign can save; and the sovereign can default. Under these conditions: i) an ex ante premium leads to higher coverage; ii) the premium increases with the sovereign's incentive to take risks; iii) a deductible is chosen to limit moral hazard; iv) the deductible-to-support ratio is decreasing with the size of the realized shock; and v) the change in the choice of savings when insurance is available is ambiguous, as there is a trade-off between inducing higher effort and increasing the likelihood of default.