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Book Cover
Author Messmacher, Miguel, author

Title Sovereign insurance and program design : what is optimal for the sovereign? / prepared by Miguel Messmacher
Published [Washington, D.C.] : International Monetary Fund, IMF Institute, 2006
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Description 1 online resource (28 pages) : illustrations
Series IMF working paper ; WP/06/64
IMF working paper ; WP/06/64
Summary 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
Notes "March 2006."
Bibliography Includes bibliographical references
Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. MiAaHDL
digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL
Print version record
Subject International Monetary Fund.
Insurance -- Econometric models.
International finance -- Econometric models.
Moral hazard -- Econometric models.
Form Electronic book
Author IMF Institute.
International Monetary Fund.
ISBN 128351558X
1451908601 (E-Book)