Debt Sustainability under Catastrophic Risk : The Case for Government Budget Insurance

WPIEA2008044 Image
Price:  $18.00

Author/Editor: Eduardo A Cavallo, Eduardo Borensztein, Patricio Valenzuela
Release Date: © February, 2008
ISBN : 978-1-45186-906-4
Stock #: WPIEA2008044
Stock Status: On back-order

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Natural disasters are an important source of vulnerability in the Caribbean region. Despite being one of the more disaster-prone areas of the world, it has one of the lowest levels of insurance coverage. This paper examines the vulnerability of Belize's public finance to the occurrence of hurricanes and the potential impact of insurance instruments in reducing that vulnerability. The paper finds that catastrophic risk insurance significantly improves Belize's debt sustainability. In addition, the methodology employed makes it possible to estimate the appropriate level of insurance, which for the case of Belize is a maximum coverage of US$120 million per year.


Debt , Economic policy , Financial institutions and markets , Fiscal policy , Insurance

More publications in this series: Working Papers

More publications by: Eduardo A Cavallo ; Eduardo Borensztein ; Patricio Valenzuela