A fiscal shock absorber for the Eurozone? Lessons from the economics of insurance

Daniel Gros, 19 March 2014

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Even before the euro crisis started, it had been widely argued that the Eurozone needed a mechanism to help countries overcome idiosyncratic shocks. The experience of the crisis itself seemed to make this case overwhelming, and throughout the EU institutions it is now taken for granted that the Eurozone needs a system of fiscal shock absorbers.

Topics: EU institutions, Macroeconomic policy, Welfare state and social Europe
Tags: euro, eurozone, Eurozone crisis, fiscal policy, fiscal shock absorbers, fiscal shocks, fiscal union, insurance

Googling systemically important insurers

David Veredas, Matteo Luciani, Mardi Dungey, 22 April 2013

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An arbitrage opportunity is being created for insurers and, if not overseen, it may entail systemic risks.

Topics: International finance
Tags: insurance

Countercyclical regulation in Solvency II: Merits and flaws

Jon Danielsson, Roger Laeven, Enrico Perotti, Mario Wüthrich, Rym Ayadi, Antoon Pelsser, 23 June 2012

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The October 2011 Solvency II draft introduces the possibility of a countercyclical premium.

Topics: EU policies, International finance
Tags: countercyclical premium, financial regulation, insurance, Solvency II

Addressing the incompleteness of long-term care insurance

Joan Costa-i-Font, 9 June 2012

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 With rapid population ageing, expenditure on long-term care – that is, care and assistance for old-age dependent elderly – has risen faster than health expenditure. Perhaps surprisingly, this increase is far more due to population ageing than to changes in people’s health (Colombo and Mercier 2012, Breyer et al. 2011).

Topics: Health economics
Tags: Ageing population, insurance, long-term care

What determines the optimal mix of public and private insurance?

Giuseppe Bertola, Winfried Koeniger, 29 April 2011

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In all economies, both public policies and private contracts provide insurance. Government-sponsored social insurance programmes cover many health, employment and disability risks. Households can also insure partially against these and other risks in private markets by buying explicit state-contingent insurance or by accumulating wealth.

Topics: Financial markets, Labour markets
Tags: insurance

Valuing insurers' liabilities during crises: What EU policymakers should NOT do

Con Keating, Jon Danielsson, 18 March 2011

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At the height of the last crisis, the market value of the assets of insurance companies fell sharply while the present value of their liabilities remained essentially unchanged. Under recently proposed insurance regulations, similar events might result in insurance firms ending up in breach of regulations, thus requiring them to increase capital quickly to avoid official interventions.

Topics: EU policies
Tags: insurance, liquidity premium, solvency

The rise of obesity in Europe: An economic perspective

Giorgio Brunello, Pierre-Carl Michaud, Anna Sanz-de-Galdeano, 6 October 2009

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When comparing obesity rates in Europe and the US, two basic facts emerge:

Topics: Health economics
Tags: externalities, insurance, obesity

Insurance against systemic crises: The real contract between society and banks

Hans Gersbach, 8 August 2009

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The current crisis is a brutal reminder of the fragility of banks (Greenlaw et al. 2008, Pagano 2008, Shin 2008, and Hellwig 2008).

Topics: Financial markets
Tags: banks, insurance, systemic crises

Have social security reforms shifted too much risk to individuals? The financial crisis suggests they might have

Monika Bütler, 13 February 2009

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The financial crisis comes right at a time when major reforms to social security systems around the world are evolving. These reforms were primarily initiated to tackle demographic transitions and resolve resulting fiscal imbalances.

Topics: Financial markets
Tags: insurance, risk, safety net, social security reforms

Food prices: The need for insurance

Esther Duflo, 25 April 2008

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Throughout last week, violent riots in Haiti – provoked by Haitians’ fury over the increased price of basic foodstuffs – brought the issue of agricultural prices to the forefront. Other incidents occurred in Indonesia, Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen. Several large rice producers (e.g.

Topics: Development, Poverty and income inequality
Tags: agricultural producers, food prices, insurance, poor people

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