Can you make similar cases for subsidizing micro saving

Reference no: EM132174826

Question: 1. Arguments for subsidizing small loans have long been made. Can you make similar cases for subsidizing micro saving? On grounds of equity? On grounds of enhancing efficiency? Do the arguments you make seem more or less persuasive than the arguments for subsidizing credit?

2. Explain briefly two reasons as to why it is nearly impossible for individuals living in rural areas to find effective crop insurance.

Reference no: EM132174826

Questions Cloud

Compute the premium fee set by the insurer : Consider an economy in which there are two types of risk-averse individuals. Type 1 risks losing $10 with 40 percent probability and nothing with 60 percent.

Show that relative to individual one : Suppose that there are two risk-averse individuals with the same utility function u = (w0.7/0.7), where w is wealth. Their initial wealth endowment.

Will there be any investment at given date : Consider again an economy like the one described in except that in this case all individuals face the risk of a negative shock at the end of period 2.

Show that the two types will invest in one project : Moreover, suppose that all individuals are very patient, that is, that their discount factor ß = 1. All borrowers are protected by limited liability.

Can you make similar cases for subsidizing micro saving : Arguments for subsidizing small loans have long been made. Can you make similar cases for subsidizing micro saving? On grounds of equity?

How can precautionary savings be explained : As discussed in chapter 3, ROSCAs are very common across poor and middle income countries. How can precautionary savings be explained under the rationality.

Should facilitating micro saving precede microcredit : Should facilitating micro saving precede microcredit and not the other way around? Crop insurance programs have often failed or have cost governments heavily.

Would the moneylender be willing to lend in the first place : Suppose that there is another lending option in this community: a moneylender. This moneylender offers loans with a new feature: if you do n ot pay back.

Who wished to purchase a country motel business : John and Natalie are a married couple, who wished to purchase a country motel business.

User Account

All Pages