Bankruptcy - a process that wipes out debts and allows fresh starts - is a necessary part of any dynamic economy.
Fewer bankruptcies isn't always a good thing. It can be a sign of excessive risk aversion on the part of both lenders and borrowers, a paucity of what John Maynard Keynes characterized as "animal spirits."
As CEA chair Jared Bernstein tells Axios, "we know this variable is pretty highly elastic to rate rises."
Note how bankruptcies declined as the economy went into recession in the early 2000s." he said of the chart above.
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