Economics at your fingertips  

Asymmetric Dynamics of Insurance Premium: The Impact of Monetary Policy Uncertainty on Insurance Premiums in Japan

Mehmet Balcilar (), Godwin Olasehinde-Williams () and Muhammad Shahbaz ()

No 15-39, Working Papers from Eastern Mediterranean University, Department of Economics

Abstract: By employing a non-linear autoregressive distributed lag (NARDL) model, this study investigates the effect of monetary policy uncertainty on insurance premium per-capita in Japan. Asides the confirmation of a long-run relationship between monetary policy uncertainty, insurance premium per-capita and real income per-capita, we also find that a positive relationship exists between monetary policy uncertainty and insurance premium per-capita. This shows that when economic policy uncertainty increases (decreases) then insurance premiums increases (decreases) in response. Moreover, we discovered that monetary policy uncertainty impacts insurance premium per-capita in an asymmetric way, such that negative changes have a bigger effect than positive changes on total insurance premium per-capita in Japan. We also found that real income per-capita has a significant and positive effect on insurance premium per-capita, and that the long run elasticity of insurance premium per-capita real income per-capita is smaller than unit. This implies that insurance is a necessity and not a luxury in Japan.

Keywords: Monetary Policy Uncertainty; Insurance Premiums; NARDL (search for similar items in EconPapers)
JEL-codes: C32 G22 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ias
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) First version, 2018 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from Eastern Mediterranean University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mehmet Balcilar ().

Page updated 2019-04-14
Handle: RePEc:emu:wpaper:15-39.pdf