Policy Should Focus on the Need to Overcome Private Indebtedness
2 Pages Posted: 6 Nov 2017
Date Written: November 1, 2017
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: Suggested Citation