Lester, Rodney2014-06-302014-06-302014-06https://hdl.handle.net/10986/18830While the real sector and governments (along with a few micro economists) have long recognized the core economic role that the insurance function plays, the mainstream economics profession has largely treated it as invisible background. This literature review of the relevant research, most of which has been carried out in the past few decades, demonstrates that the insurance sector contributes at a basic level to inclusive economic growth and the effectiveness of the credit function. It also shows that the latter impact may be particularly fundamental in assisting the poor to avoid poverty traps and to progress economically. However, the research and the theoretical models underpinning it also highlight certain constraints to the efficient utilization of the insurance function. The literature dealing with innovations designed to overcome these constraints is reviewed and successful initiatives and remaining challenges are identified.en-USCC BY 3.0 IGOABSENCE OF INSURANCEACCESS TO INSURANCEAGENCY RELATIONSHIPAGRICULTURAL ECONOMICSAGRICULTURAL INSURANCEALLOCATIONALLOCATION OF CAPITALALTERNATIVE FUNDINGASSET DIVERSIFICATIONASSET MANAGEMENTBALANCE SHEETBANK CREDITBANK LENDINGBANK LOANSBANKING SECTORBANKING SECTOR DEVELOPMENTBANKING SECTORSBANKING SYSTEMBANKING SYSTEMSBENEFICIARIESBONDBOND MARKETBOND MARKET DEVELOPMENTBOND MARKETSCAPITAL BASECAPITAL FLOWSCAPITAL INVESTMENTCAPITAL LOSSCAPITAL MARKETCAPITAL STOCKSCAPSCASH FLOWCASH FLOWSCATASTROPHE INSURANCECHILD LABORCLIMATECLIMATE CHANGECOLLATERALCONSUMER CREDITCONSUMER PROTECTIONCONSUMPTION SMOOTHINGCONTRACT ENFORCEMENTCONTRACTUAL SAVINGSCONTRACTUAL SAVINGS INSTITUTIONSCORPORATE GOVERNANCECOST OF INSURANCECREDIBILITYCREDIT CONSTRAINTSCREDIT COOPERATIVECREDIT MARKETCREDIT RISKCROP INSURANCEDAMAGESDEBTDEBT CRISISDEFICITSDEMAND FOR CREDITDEPOSITDERIVATIVEDEVELOPING COUNTRIESDISASTER INSURANCEDISBURSEMENTDISCOUNT RATESDISTRIBUTIONAL EFFECTSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC GROWTH RATESECONOMIC IMPACTSECONOMIC MODELSEMERGING MARKETSENABLING ENVIRONMENTENFORCEMENT CONSTRAINTSENFORCEMENT MECHANISMSEXOGENOUS SHOCKSEXPENDITUREEXPENDITURESEXTREME POVERTYFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL INNOVATIONFINANCIAL INSTITUTIONSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL SERVICESFINANCIAL STABILITYFISCAL BURDENFISCAL POLICYFLOOD INSURANCEFUTURESGLOBAL CAPITALGLOBAL CAPITAL MARKETSGOVERNMENT POLICYGOVERNMENT SUBSIDIESGOVERNMENT SUBSIDYGOVERNMENT SUPPORTHIDDEN ACTIONHOUSEHOLD INCOMEHUMAN CAPITALHURRICANEHURRICANE RISKINCOMEINCOME GROWTHINCOME HOUSEHOLDSINCOME LEVELINCOME LEVELSINCOME STREAMSINCOME VARIABILITYINFLATIONINFLATION RATESINFORMAL CREDITINFORMATION ASYMMETRIESINFORMATION ASYMMETRYINSTRUMENTINSURANCEINSURANCE COMPANIESINSURANCE CONTRACTINSURANCE CONTRACTSINSURANCE INDUSTRYINSURANCE MARKETINSURANCE MARKETSINSURANCE MECHANISMSINSURANCE PENETRATIONINSURANCE PREMIUMINSURANCE PREMIUMSINSURANCE PRODUCTINSURANCE PRODUCTSINSURANCE REGULATIONINSURANCE RISKINSURANCE SECTORINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL FINANCEINTERNATIONAL INSURANCEINVESTMENT BANKINGINVESTMENT STRATEGIESLAND HOLDINGSLEGAL FRAMEWORKLEGAL SYSTEMLENDERSLEVEL OF RISKLIABILITYLIFE INSURANCELIFE INSURANCE PREMIUMLIFE INSURANCE PRODUCTSLIQUIDITYLIQUIDITY CONSTRAINTSLIQUIDITY CRISISLOANLOAN DEFAULTLOCAL GOVERNMENTSLONG-TERM INVESTMENTMACROECONOMIC MANAGEMENTMARKET CAPMARKET CAPITALIZATIONMARKET DEVELOPMENTMARKET FAILURESMICRO-CREDITMICROCREDITMICROFINANCEMICROINSURANCEMONETARY POLICYMONEY SUPPLYMONEYLENDERSMORAL HAZARDMUTUAL FUNDSNATIONAL ACCOUNTSNATIONAL INCOMENATURAL DISASTERNATURAL DISASTERSOPPORTUNITY COSTSOUTPUT DECLINESPENSIONPENSION FUNDSPER CAPITA INCOMESPERFORMANCE RISKPERSONAL LOSSPOLICY MAKERSPOLITICAL ECONOMYPORTFOLIOPORTFOLIOSPRIVATE CREDITPROPERTY RIGHTSREGULATORY FRAMEWORKSREMITTANCERESERVESRESOURCE ECONOMICSRISK AVERSIONRISK EXPOSURERISK FACTORRISK MANAGEMENTRISK MANAGEMENT TOOLSRISK NEUTRALRISK PROFILERISK SHARINGRISKY ASSETRULE OF LAWRURAL CREDITRURAL FINANCIAL MARKETSSAVINGS RATESAVINGS RATESSOCIAL CAPITALSOVEREIGN RISKTAXTELECOMMUNICATIONSTIMELY PAYMENTTRADE BALANCETRADE BALANCESTRADINGTRANSACTIONTRANSACTION COSTSTRANSITION COUNTRIESTROPICAL CYCLONESTURNOVERUTILITY FUNCTIONSVALUATIONWEATHER DERIVATIVESWEATHER INSURANCE10.1596/1813-9450-6943