2006 Articles

What Is the Appropriate Role of the Federal Government in the Private Markets for Credit and Insurance? What Is the Outlook?

Stiglitz, Joseph E.

I want to focus my remarks this morning on the role of government in risk-bearing. A little over a decade ago, I addressed the issue of the role of government in riskbearing at a conference sponsored by the Federal Reserve Bank of Cleveland (Stiglitz, 1993). I used the market failure/government failure paradigm, sketching out in particular limitations in markets and government that led to a role for government in this area.