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Insurance Contracts as Commodities: A Note
Andreas Hornstein and Edward C. Prescott
The Review of Economic Studies
Vol. 58, No. 5 (Oct., 1991), pp. 917-928
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2297944
Page Count: 12
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This paper extends recent developments in general equilibrium theory and applies them to the problem of measuring the real output of an economy's insurance sector. These developments permit a priced commodity to be a complex incentive-compatible contract. These contracts are not bundles of more basic commodities. These contracts are elementary in the same sense that event-contingent goods deliveries are elementary in the Arrow-Debreu framework.
The Review of Economic Studies © 1991 The Review of Economic Studies, Ltd.