Debt relief measures should be implemented cautiously from "summary" of House of Debt by Atif Mian,Amir Sufi
When considering debt relief measures, it is crucial to proceed with caution. While debt relief can provide much-needed relief to struggling borrowers, it also carries potential risks and unintended consequences. Careful consideration must be given to the design and implementation of such measures to ensure that they achieve their intended goals without exacerbating existing problems. One risk of debt relief measures is moral hazard. If borrowers believe that they will be bailed out in the event of financial distress, they may be more likely to take on excessive levels of debt or engage in risky behavior. This moral hazard can ultimately lead to a worsening of the underlying problem, rather than a resolution. Additionally, deb...
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