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Debt Relief and Economic Recovery


Published July 28, 2021

New research indicates that targeted household debt relief helps the economy recover. Defaulting on loans creates a negative domino effect on the economy, but during the 2008 recession, household debt relief was vital in stabilizing housing prices and employment. The 2020 pandemic has had a devasting effect on the economy, but targeted debt relief could help get the economy back on track.

Discussion Questions:

  1. Why is debt relief necessary?
  2. How can debt relief speed up economic recovery?

Additional resources:

  • Read “If You Want a Quick Recovery, Forgive Debts,” by Tomasz Piskorski and Amit Seru. Available here.
  • Watch as Amit Seru talks about government and household private debt relief during the pandemic. Available here.
  • Watch as Amit Seru provides an overview of the financial regulations and challenges facing the banking sector. Available here.