The abolition or phasing out of interest deductions have more negative than positive effects.

The conclusion is drawn in a recent doctoral dissertation by IIES graduate student, Markus Karlman, which is also critical of stricter credit restrictions as a wise measure in the face of economic downturns. 

The results in the chapter (written with fellow IIES graduate students Karin Kinnerud and Kasper Kragh-Sørensen) show that the situation for households on average worsens if the interest deduction is immediately removed in its entirety and a majority of households are against such a reform.

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Click here to download and read Markus Karlman's dissertation.