Cover Country Insurance
Country Insurance
The Role of Domestic Policies
Download PDF (555.2 KB) Download Epub

Abstract

This paper focuses on what countries can do on their own—that is, on the role of domestic policies—with respect to country insurance. Member countries are routinely faced with a range of shocks that can contribute to higher volatility in aggregate output and, in extreme cases, to economic crises. The presence of such risks underlies a potential demand for mechanisms to soften the blow from adverse economic shocks. For all countries, the first line of defense against adverse shocks is the pursuit of sound policies. In light of the large costs experienced by emerging markets and developing countries as a result of past debt crises, fiscal policies should seek to improve sustainability, taking into account that sustainable debt levels seem to be lower in emerging and developing countries than in advanced countries. Although much can be accomplished by individual countries through sound policies, risk management, and self-insurance through reserves, collective insurance arrangements are likely to continue playing a key role in cushioning countries from the impact of shocks.

Buy Book in Print
Author:
Mr. Paolo Mauro
Search for other papers by Mr. Paolo Mauro in
Current site
Google Scholar
PubMed Close
,
Mr. Torbjorn I. Becker
Search for other papers by Mr. Torbjorn I. Becker in
Current site
Google Scholar
PubMed Close
,
Mr. Jonathan David Ostry
Search for other papers by Mr. Jonathan David Ostry in
Current site
Google Scholar
PubMed Close
,
Mr. Romain Ranciere
Search for other papers by Mr. Romain Ranciere in
Current site
Google Scholar
PubMed Close
, and
Mr. Olivier D Jeanne
Search for other papers by Mr. Olivier D Jeanne in
Current site
Google Scholar
PubMed Close
Series:
Occasional Papers
Publisher:
International Monetary Fund
Language:
English
Publication Date:
10 Apr 2007
DOI:
https://doi.org/10.5089/9781589066076.084
ISBN:
9781589066076
ISSN:
0251-6365
Pages:
44
Keywords:
OP; cost; emerging market country; commodity price futures; banking crisis dummy; crisis; terms of trade shock; lending boom date; Sudden stops; Emerging and frontier financial markets; Reserve positions; Foreign direct investment; Bonds; Global; Asia and Pacific; Africa; output event; catastrophe bond; Insurance; Caribbean
Legal-disclaimer:
The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.
  • Collapse
  • Expand