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AN ECONOMIC ANALYSIS OF BANKRUPTCY STATUTES
Author(s) -
DYE RONALD A.
Publication year - 1986
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1986.tb01820.x
Subject(s) - bankruptcy , statute , incentive , economics , actuarial science , business , law , finance , microeconomics , political science
Personal bankruptcy statutes are analyzed as social insurance agreements. The risk‐sharing and incentive effects resulting from changes in bankruptcy laws are studied. It is shown that increasing the leniency of bankruptcy statutes may have unambiguous short‐term benefits to potential bankrupts, but may be detrimental in the long‐run.