Measuring the effects of debt forgiveness
In the aftermath of the Great Recession, U.S. policymakers and the public are more aware than ever of the dangers of large increases in private debt. But we are now left with a considerable amount of debt that many households can’t even begin to dig out from under, which not only holds back consumption but also drastically increases wealth inequality. Many analysts recommend partial debt forgiveness as a way of helping households better handle their debt loads. This research, which includes the compilation of a brand-new data source, will help economists evaluate debt-relief programs that have implications for tax policy, housing finance, and student loan concessions.