TY - BOOK ID - 11273211 TI - Sovereign Insurance and Program Design : What is Optimal for the Sovereign? AU - Messmacher, Miguel. AU - International Monetary Fund. AU - IMF Institute. PY - 2006 SN - 1451863241 1462312489 1451908601 9786613828033 145278647X 128351558X PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Electronic books. -- local. KW - Insurance -- Econometric models. KW - International finance -- Econometric models. KW - International Monetary Fund. KW - Moral hazard -- Econometric models. KW - Finance KW - Business & Economics KW - Insurance KW - Moral hazard KW - International finance KW - Econometric models. KW - International monetary system KW - International money KW - Assurance (Insurance) KW - Coverage, Insurance KW - Indemnity insurance KW - Insurance coverage KW - Insurance industry KW - Insurance protection KW - Mutual insurance KW - Underwriting KW - Internationaal monetair fonds KW - International monetary fund KW - International economic relations KW - Risk (Insurance) KW - Finance: General KW - Macroeconomics KW - Taxation KW - Industries: Financial Services KW - International Economic Order and Integration KW - International Monetary Arrangements and Institutions KW - International Lending and Debt Problems KW - International Policy Coordination and Transmission KW - Insurance Companies KW - Actuarial Studies KW - General Financial Markets: Government Policy and Regulation KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Taxation, Subsidies, and Revenue: General KW - Insurance & actuarial studies KW - Public finance & taxation KW - Insurance companies KW - Consumption KW - Tax incentives KW - Financial risk management KW - Economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:11273211 AB - 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. ER -