Does insurance hedge macro volatility? Global evidence

Paul Moon Sub Choi, Won Young Chae, Joung Hwa Choi, Young Bin Han

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


Insurance is known in the literature as a contribution to economic growth. In our crosscountry 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.

Original languageEnglish
Pages (from-to)307-315
Number of pages9
JournalInvestment Management and Financial Innovations
Issue number2
StatePublished - 2017

Bibliographical note

Funding Information:
Special thanks are due to Hong Min Zi. Part of this research was conducted while P.M.S. Choi and J.H. Choi were visiting scholars at the Samuel Curtis Johnson Graduate School of Management, Cornell University. J.H. Choi is grateful to Kangnam University for a grant. Standard disclaimer rules apply and all errors are of our own.

Funding Information:
We source the estimates of the aforementioned variables from the databases maintained by the World Bank (Gdp, GdpCap, Growth, MacroVol, TradeOpen, GovExp, CurrAcc, Capital), the Organization for Economic Co-operation and Development (OECD; GovExp, CurrAcc, Capital), the International Monetary Fund (IMF; Inflation, CurrAcc), Insurance Journal (Sigma; Insurance, InsLife, InsNonLife), and Financial Structure Database (Turnover, InsLifePen, InsNonLifePen, Private Credit).We construct a panel dataset with the estimated and procured variables and estimate missing values by multiple imputation (Dempster et al., 1977; van Dyk and Meng, 2001) in order to minimize inefficiency due to information loss.

Publisher Copyright:
© Paul Moon Sub Choi, Won Young Chae, Joung Hwa Choi, Young Bin Han, 2017.


  • Economic stability
  • Insurance
  • Macroeconomic volatility
  • Market completeness


Dive into the research topics of 'Does insurance hedge macro volatility? Global evidence'. Together they form a unique fingerprint.

Cite this