Economists Find Bailout Approach to Financial Crisis is Inefficient Action

February 7th, 2011
in econ_news

Econintersect:  Two economists at the IMF (Internatiuonal Monetary Fund), Michael Kumhof and Romain Ranciere, have studied the two major financial crises of the past century.  They find that the bailout of banks is an inefficient pathway to resolving such events.

Follow up:

Kumhof and Ranciere have constructed models that show the most efficient resolution involves increasing working class incomes to enable overextended debtors the opportunity to earn their way out of overleverage.  They argue that the current policy of supporting the lenders leads to much slower resolution and higher tax burdens in the future.

Source:  GEI Analysis

  









Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.















 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved