Explain how moral hazard could lead people to undersave

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Question: 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, 2004a]. Explain how moral hazard could lead people to undersave if Social Security were replaced with voluntary personal accounts.

Reference no: EM131499969

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Explain how moral hazard could lead people to undersave : As part of his privatization plan to reform Social Security, Nobel laureate Edward Prescott advocated that personal accounts be made mandatory in order.

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