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Book Cover
Author Chami, Ralph, author

Title A model of the IMF as a coinsurance arrangement / prepared by Ralph Chami, Sunil Sharma, and IIhyock Shim
Published [Washington, D.C.] : International Monetary Fund, [2004]
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Description 1 online resource (44 pages)
Series IMF working paper ; WP/04/219
IMF working paper ; WP/04/219
Summary Annotation The paper shows that a coinsurance arrangement among countries can, in principle, play a useful role in helping countries bear the risks involved in developing their economies and integrating into the global financial system. the operation of the coinsurance arrangement is examined under different loan contracts offered by the IMF. the analysis suggests that, if the IMFs 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 incentivesinduce higher effort by member countries to avoid and overcome crisesthan an ex-post loan contract. Such ex ante contracts highlight the need for precommitment to contend with the Samaritans dilemma and time inconsistency. the paper also shows that state-contingent repayment schemes are needed to deal with King Lears dilemma
Bibliography Includes bibliographical references
Notes Print version record
Subject International Monetary Fund.
Moral hazard.
Form Electronic book
Author Shim, Ilhyock, author
Śarmā, Sunīla, author
IMF Institute.
International Monetary Fund.
ISBN 1282395548