Planning Papers

Shocks, Assets and Credit #

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Author(s):   Malcolm Keswell and Justine Burns

Well functioning credit and insurance markets, in many respects, obviates the need for public policy that is oriented at providing support to households when they face economic hardship. But when the market for cheap informal credit is altogether absent, risk-averse (poorer) households will generally respond to such risks by adopting strategies that have long term consequences for their well being.