Country Insurance: The Role of Domestic Policies
Countries are subjected to a wide variety of shocks that often have major and enduring consequences. Against this background, mechanisms aimed at preventing such shocks from causing excessive economic disruption have the potential to provide sizable benefits for the affected countries and the global economy as a whole. This paper examines various types of insurance mechanisms that countries can pursue to soften the consequences of adverse shocks. Highlights also include the role of domestic policies with respect to country insurance.