Video: Economics 101: Defining a “Moral Hazard”

First Published: 2010-01-15

A new video released today by the Center for Freedom and Prosperity Foundation (CF&P) is the first in their "Economics 101" video series, a project designed to educate students, young people, and the general public about basic free market principles.

In this video, entitled "Economics 101: Moral Hazard," Nicole Kurokawa of the Independent Women’s Forum explains the concept of moral hazard, which occurs when bad policies give people incentives to make imprudent choices.

She explains how government intervention created moral hazard in the housing market by subsidizing bad mortgages. This, in turn, produced a housing bubble followed by a financial crisis.

 

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