A Model of the IMF as a Coinsurance Arrangement
Sunil Sharma () and
Ralph Chami ()
Economics - The Open-Access, Open-Assessment E-Journal, 2008, vol. 2, No 2008-14, 41 pages
The paper shows that an IMF-like coinsurance arrangement among countries can play a useful role in the global financial system. The operation of the coinsurance arrangement is examined under different loan contracts. It shows that, if the IMF?s objective is to safeguard its resources and be concerned about the welfare of the borrower, an ex ante loan contract is more likely to create the right incentives than an ex post loan contract. Such contracts highlight the need for precommitment to contend with the Samaritan?s dilemma and time inconsistency, and state-contingent repayment schemes to deal with King Lear?s dilemma.
Keywords: IMF; coinsurance arrangement; moral hazard; Samaritan?s dilemma; King Lear?s dilemma (search for similar items in EconPapers)
JEL-codes: D82 F02 F33 G22 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
Working Paper: A Model of the IMF as a Coinsurance Arrangement (2007)
Working Paper: A model of the IMF as a coinsurance arrangement (2005)
Working Paper: A Model of the Imf As a Coinsurance Arrangement (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifweej:7281
Access Statistics for this article
Economics - The Open-Access, Open-Assessment E-Journal is currently edited by Dennis J. Snower
More articles in Economics - The Open-Access, Open-Assessment E-Journal from Kiel Institute for the World Economy (IfW) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().