Scott Sumner writes: "I am increasingly of the view that moral hazard is the central problem with our financial system." This is a very popular view with substantial segments of the left and the right ...

Desperate times call for desperate measures. In recent years and in the face of unprecedented changes in the climate system, some previously unknown and risky solutions have been proposed to put a ...

Why would a big bank with so much at stake not care about the risks that they were taking? Well, at that point, they'd all been bailed out. I mean, my feeling at that point was, well, of course they ...

Florida’s home insurance market has long been a mess. With private property insurance getting scarcer and more expensive, some members of the legislature are pushing for an even greater role for the ...

I’ve been making the argument that while moral hazard, in the wake of the financial crisis, is now a serious problem (because of the implicit guarantee that big banks will not be allowed to fail), it ...

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated. “Moral hazard” is a well-established ...

MORAL hazard is a problem that crops up often in economics. People behave differently if they do not face the full costs or risks of their actions: deposit insurance makes customers less careful about ...

To date we have taken apart the firm and examined where institutions offer no advantage over bargaining by individuals, or relying on the price mechanism. We have seen two early explanations for ...

The prospect of judicial review may cause legislators to adjust their behavior to anticipate the court’s response. This can serve as a source of moral hazard for legislators. Legislators can pursue ...

I want to revisit the subject of moral hazard and the financial crisis, which I posted about yesterday, because I think the argument I made has been misunderstood in an important way, and because I ...