A Way out of Debt Reliance: Accepting Risk in our Financial System

Rise in income inequality, worsening economic outlook for the younger generations, swelling public debt burden for everyone, these seem to be among the major topics worrying inclusive economists everywhere. This has also given rise to news articles, presidential candidates, and academic publications that preach the failures of capitalism and advocate the need for more socially oriented policies (if not outright socialism). In the second policy brief of the Economics for Inclusive Prosperity series, Anat Admati [1] very rightly begins her essay with the sentence “A healthy and stable financial system enables efficient resource allocation and risk sharing.” She then goes on to focus on how regulations should be designed and how these would ensure and enable a better distributi...