Ep23 “When Banking Fails” with Amit Seru
All Else Equal: Making Better Decisions
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The Importance of Risky Investments in the Economy
People want to have it both ways. On the one hand they argue without banks making risky investments the whole economy would go down. And on the other hand, they say it's very important that we offer depositors risk free deposits. But the whole point is that you cannot have banks with riskless deposits and have them heavily invest in risky projectsWithout having some sort of a guarantee system or some sort of support system.
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