Borrowing constraints boost children's savings and welfare, raising overall well-being.
The study looked at how a rule that stops kids from borrowing money in the future affects their well-being. They used a model with parents who care about their kids. The rule makes kids save more and get more money from their parents, which makes everyone better off in the short and long term. It also makes people save more money overall. So, when prices can change, the rule has a positive impact on everyone's well-being.