Policy Should Focus on the Need to Overcome Private Indebtedness

2 Pages Posted: 6 Nov 2017

See all articles by Savvakis C. Savvides

Savvakis C. Savvides

Queen's University - John Deutsch Institute for the Study of Economic Policy

Date Written: November 1, 2017

Abstract

The author emphasizes the need to address private indebtedness as the main cause of the problem which manifests itself in a huge amount of non-performing loans following the bail-in of deposits of 2013. The focus should not be on how to compensate depositors or bond holders or even shareholders of the affected banks. It should be on how the over-indebted businesses and households can lighten their debt burden and be in a position to engage in normal economic activity in a stable and sustainable manner.

Keywords: Balance Sheet Recession, Debt Deflation Spiral, Sustainable Growth, Debt Minimization

JEL Classification: D61, G17, G21, G32, G33, H43

Suggested Citation

Savvides, Savvakis C., Policy Should Focus on the Need to Overcome Private Indebtedness (November 1, 2017). Available at SSRN: https://ssrn.com/abstract=3063971 or http://dx.doi.org/10.2139/ssrn.3063971

Savvakis C. Savvides (Contact Author)

Queen's University - John Deutsch Institute for the Study of Economic Policy ( email )

Canada

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