Via The price of policy uncertainty | The University of Chicago Booth School of Business.
The price of policy uncertainty
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in macroeconomics, politics - USA Tags: regime uncertainty
GDP per New Zealander remains well below leading OECD economies due to a large shortfall in labour productivity
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in economic growth, macroeconomics, politics - New Zealand
Economics New Zealand: Did we move too quickly?
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in macroeconomics, politics - Australia, politics - New Zealand, politics - USA Tags: monetary policy
The first Paul Krugman on efficiency wage arguments for a higher minimum wage
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in labour economics, minimum wage, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality Tags: George Bush derangement syndrome, living wage, Paul Krugman, public intellectuals
HT: economistsview
The rise of single parenthood in the USA
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in labour economics, politics - USA, population economics, welfare reform Tags: single parenthood
Economic Developement in Cuba compared
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in comparative institutional analysis, development economics, growth disasters, growth miracles, politics - USA Tags: Chile, Costa Rica, Cuba
Break-Even Points for U.S. Shale Oil
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in energy economics, politics - USA Tags: Oil prices, oil shale
HT: Bloomberg.com
What would happen if the Yellowstone supervolcano actually erupted? – Vox
08 Feb 2015 Leave a comment
Should car insurance be run like earthquake insurance in New Zealand?
07 Feb 2015 1 Comment
in economics of natural disasters, politics - New Zealand Tags: Christchurch earthquake, disaster relief
Would you think it is a good idea that you have two car insurers if and only if your car is hit by a pink car? That’s how they run earthquake insurance in New Zealand.
This is how the system of earthquake in insurance in New Zealand would run for a car: if your car is in an accident with a pink car, the first say $2000 of the damages is paid for by a special insurer. After that, your normal car insurance policy applies.
I don’t know of anyone who insures their car with two different people depending on the probability of different events, possibly because I don’t know that many people who are extremely stupid.
In New Zealand, the first $100,000 of earthquake damage is insured by a government insurance company called the Earthquake Commission. After that, your normal homeowners insurance covers the rest of the earthquake damage. The premium for the earthquake insurance with the Earthquake Commission is collected as part of your normal insurance premium to your home insurance provider.
Fortunately for you, if this scheme of insurance applied to your car, the repairs are not delayed for several years with High Court litigation over whether the Christchurch earthquake was a single event or a succession of separate earthquakes. If the two major earthquakes in Christchurch together with the thousands of after-shocks was a succession of separate earthquakes, the first $100,000 of damages for each of these several thousand after-shocks is the responsibility of the Earthquake Commission, not the normal insurer of the house.
Would it make sense to insure cars in the same way earthquake insurance is run in New Zealand? The answer is no. Any sensible person buys their insurance from one company and lets that insurance company sought out reinsurance of major and rare events with the global reinsurance pools.
With global reinsurance pools, there is no reason for a separate government insurance against earthquakes in New Zealand. The Earthquake Commission and its separate scheme of insurance for earthquakes should be abolished as superfluous and a magnet for litigation over insurance company liabilities in the case of major earthquakes.
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