Does insurance hedge macro volatility? Global evidence

  • Received June 14, 2017;
    Accepted June 30, 2017;
    Published August 7, 2017
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  • Article Info
    Volume 14 2017, Issue #2 (cont. 2), pp. 307-315
  • Cited by
    3 articles

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Insurance is known in the literature as a contribution to economic growth. In our cross-country analysis, we found out that insurance density also appears to subdue macro volatility. In other words, an overall expansion of insurance coverage in an economy cushions aggregate risks. This empirical inference remains robust to controlling for other covariates known to co-move with economic activities. Given that the contribution of insurance to economic growth is more impactful in developing countries than in industrialized economies, not only this result is appealing to economic intuition, but also extends the claims in the existing researches.

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    • Table 1. Comparison between Arena (2008) and Han et al. (2010)
    • Table 2. Sample statistics
    • Table 3. Correlation coefficients
    • Table 4. GMM regression results