In this brief, Senior Scholar Jan Kregel examines the question of how we ought to distribute losses in a debt resolution between debtors and creditors. In the context of the eurozone sovereign debt crisis and the US subprime crisis, Kregel takes apart a prominent approach to this question that, in his view, relies too much on individual behavioral factors or cultural caricatures and inevitably concludes that debtors ought to be required to shoulder the entire burden of debt repayment.
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