scholarly journals Reserve accumulation, inflation, and moral hazard: Evidence from a natural experiment

2021 ◽  
Author(s):  
Livia Chițu
Keyword(s):  
Moral Hazard ◽  
Natural Experiment ◽  
Reserve Accumulation

The IMF As a Biased Global Insurance Mechanism: Asymmetrical Moral Hazard, Reserve Accumulation, and Financial Crises

2018 ◽  
Vol 73 (1) ◽  
pp. 35-64 ◽  
Author(s):  
Phillip Y. Lipscy ◽  
Haillie Na-Kyung Lee
Keyword(s):  
Moral Hazard ◽  
Financial Crises ◽  
Control Method ◽  
Political Influence ◽  
Set Covering ◽  
International Reserves ◽  
Synthetic Control ◽  
Data Set ◽  
Reserve Accumulation ◽  
The Imf

AbstractA large literature has established that the International Monetary Fund (IMF) is heavily politicized. We argue that this politicization has important consequences for international reserve accumulation and financial crises. The IMF generates moral hazard asymmetrically, reducing the expected costs of risky lending and policies for states that are politically influential vis-à-vis the institution. Using a panel data set covering 1980 to 2010, we show that proxies for political influence over the IMF are associated with outcomes indicative of moral hazard: lower international reserves and more frequent financial crises. We support our causal claims by applying the synthetic control method to Taiwan, which was expelled from the IMF in 1980. Consistent with our predictions, Taiwan's expulsion led to a sharp increase in precautionary international reserves and exceptionally conservative financial policies.

Moral hazard and the demand for physician services: First lessons from a French natural experiment

1998 ◽  
Vol 42 (3-5) ◽  
pp. 499-511 ◽  
Author(s):  
Pierre-André Chiappori ◽  
Franck Durand ◽  
Pierre-Yves Geoffard
Keyword(s):  
Moral Hazard ◽  
Natural Experiment ◽  
Physician Services

scholarly journals What Does Debt Relief Do for Development? Evidence from India's Bailout for Rural Households

2016 ◽  
Vol 8 (4) ◽  
pp. 66-99 ◽  
Author(s):  
Martin Kanz
Keyword(s):  
Moral Hazard ◽  
Natural Experiment ◽  
Balance Sheet ◽  
Debt Relief ◽  
Informal Credit ◽  
Substantial Impact ◽  
Debt Overhang ◽  
Balance Sheets ◽  
Household Level ◽  
The Impact

This paper studies the impact of debt relief, using a natural experiment arising from India's “Agricultural Debt Waiver and Debt Relief Scheme,” one of the largest household-level debt relief initiatives in history. I find that debt relief has a substantial impact on household balance sheets, but does not affect savings, consumption and investment, as predicted by theories of debt overhang or balance sheet distress. Instead, debt relief leads to greater reliance on informal credit, reduced investment, and lower agricultural productivity. Consistent with moral hazard generated by the bailout, beneficiaries are significantly less concerned about the reputational consequences of future default. (JEL D14, G28, O12, O16, O18, Q14, Q18)

scholarly journals Selection, Leverage, and Default in the Mortgage Market

2021 ◽  
Author(s):  
Arpit Gupta ◽  
Christopher Hansman
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Natural Experiment ◽  
Causal Effect ◽  
Mortgage Market ◽  
Point Estimates ◽  
Ex Ante ◽  
Contract Structure ◽  
Adjustable Rate ◽  
Default Prevention

Abstract We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of leverage) or adverse selection (ex ante risky borrowers choosing larger loans). We separate these information asymmetries using a natural experiment resulting from the contract structure of option adjustable-rate mortgages and unexpected 2008 divergence of indexes that determine rate adjustments. Our point estimates suggest that moral hazard is responsible for 40% of the correlation in our sample, while adverse selection explains 60%. We calibrate a simple model to show that leverage regulation must weigh default prevention against distortions due to adverse selection.

AGENCY PROBLEM DALAM PENERAPAN PEMBIAYAAN AKAD MUDHARABAH PADA PERBANKAN SYARIAH

ALQALAM ◽  
2016 ◽  
Vol 33 (1) ◽  
pp. 46
Author(s):  
Aswadi Lubis
Keyword(s):  
High Risk ◽  
Asymmetric Information ◽  
Human Resources ◽  
Moral Hazard ◽  
Adverse Selection ◽  
Agency Problem ◽  
Agency Problems ◽  
Islamic Banking ◽  
The Public

The purpose of writing this article is to describe the agency problems that arise in the application of the financing with mudharabah on Islamic banking. In this article the author describes the use of the theory of financing, asymetri information, agency problems inside of financing. The conclusion of this article is that the financing is asymmetric information problems will arise, both adverse selection and moral hazard. The high risk of prospective managers (mudharib) for their moral hazard and lack of readiness of human resources in Islamic banking is among the factors that make the composition of the distribution of funds to the public more in the form of financing. The limitations that can be done to optimize this financing is among other things; owners of capital supervision (monitoring) and the customers themselves place restrictions on its actions (bonding).

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