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| Title: | | A Model of the IMF as a Coinsurance Arrangement  |
| Authors: | | Shim, Ilhyock Sharma, Sunil Chami, Ralph |
| Issue Date: | | 2008 |
| Citation: | | [Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 2 [Issue:] 2008-14 [Pages:] 1-41 [DOI/URN:] doi:10.5018/economics-ejournal.ja.2008-14 |
| Series/Report no.: | | economics - The Open-Access, Open-Assessment E-Journal 2008-14 |
| Abstract: | | 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. |
| Subjects: | | IMF coinsurance arrangement moral hazard Samaritan?s dilemma King Lear?s dilemma |
| JEL: | | D82 F02 F33 G22 |
| Persistent Identifier of the first edition: | | doi:10.5018/economics-ejournal.ja.2008-14 |
| URL of the first edition: | | http://www.economics-ejournal.org/economics/journalarticles/2008-14 |
| Creative Commons License: | |  |
| Document Type: | | Article |
| Appears in Collections: | | Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles
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