Policymakers face an asymmetric incentive structure that biases them toward intervention: there is little reward for saying no when things then work out fine, but a huge penalty if they say no and things fall apart, creating strong pressure to say yes — which reduces short-run damage but causes long-term difficulties and a self-perpetuating bailout mentality.
causalpending
Speaker
John TaylorEvidence Quote
“it's very hard to say no in those circumstances because you don't get much reward if you say no and things work fine... you get huge penalty if you say no and things do fall apart and so there's a strong incentive to go ahead and say yes and that reduces the short-run damage long term it can cause a lot of difficulties”
Created: 6/15/2026, 9:20:12 AM
My Notes
Loading notes...