As part of his privatization plan to reform Social Security, Nobel laureate Edward Prescott advocated that personal

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As part of his privatization plan to reform Social Security, Nobel laureate Edward Prescott advocated that personal accounts be made mandatory in order to prevent rational individuals from deliberately undersaving [Prescott, 2004]. Explain how moral hazard could lead people to undersave if Social Security were replaced with voluntary personal accounts.
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Public Finance

ISBN: 978-0078021688

10th edition

Authors: Harvey Rosen, Ted Gayer

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