Insurance and Optimal Growth
The aim of this paper is to propose a theoretical connection between insurance and economic growth. We develop a simple model to insert microeconomically founded optimal insurance with moral hazard in a standard macroeconomic framework of optimal growth. We characterize the long-run equilibrium, the global dynamics and the evolution of insurance coverage with time. Three types of trajectories are identified: first, a simple dynamics with permanent partial insurance or full insurance, second, one with regime switching converging to a steady state with full or partial insurance and, finally, one with mixed equilibrium.
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|Date of creation:||Jul 2006|
|Publication status:||Published in 2006|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00085181|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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