Theoretical and Policy-Oriented Aspects of the External Debt Economics
Theoretical and Policy-Oriented Aspects of the External Debt Economics

Author: Chris Czerkawski

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 157

ISBN-13: 3642845495

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The past approach to the international debt crisis has been traditionally based on conventional banking principle in which debt had to be paid back in fuH and in time. International lending was a function of the perceived credit standing of debtor country and the return on investment (ROI). If debtor country run into difficulties and had problems with service payments - it was generally assumed that the debt-related expenditures were mismanaged. With economic stability and firm financial rules - the debt crisis was supposed to disappear after application of appropriate adjustment measures. However in the world of inconsistent lending criteria greater uncertainty and increased volatility of expectations - the problem has continued to get worse. At the beginning of the 1990s a number of countries are more indebted than at any other time in the past. Until mid 1980s extern al debt economics has been rather a disembodied concept for most economists and business leaders. The main reason for this neglect of one of the most important macroeconomic categories was difficulty of distinguishing terminologically and methodologically the domestic determinants of national expenditures from the external ones. Then there were conceptual problems in distinguishing the functional determinants of macroeconomic liquidity from external and domestic determinants of macro-economic solvency. Moreover many studies of the debt crisis were one-sided. Usually debt was seen as a 'white-black' phenomenon with debtor countries accusing creditor countries for causing the crisis and vice versa.

Global Waves of Debt
Global Waves of Debt

Author: M. Ayhan Kose

Publisher: World Bank Publications

Published: 2021-03-03

Total Pages: 403

ISBN-13: 1464815453

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The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Public Debt and Growth
Public Debt and Growth

Author: Jaejoon Woo

Publisher: International Monetary Fund

Published: 2010-07-01

Total Pages: 49

ISBN-13: 145520157X

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This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In addition, threshold effects, nonlinearities, and differences between advanced and emerging market economies are examined. The empirical results suggest an inverse relationship between initial debt and subsequent growth, controlling for other determinants of growth: on average, a 10 percentage point increase in the initial debt-to-GDP ratio is associated with a slowdown in annual real per capita GDP growth of around 0.2 percentage points per year, with the impact being somewhat smaller in advanced economies. There is some evidence of nonlinearity with higher levels of initial debt having a proportionately larger negative effect on subsequent growth. Analysis of the components of growth suggests that the adverse effect largely reflects a slowdown in labor productivity growth mainly due to reduced investment and slower growth of capital stock.

The Liquidation of Government Debt
The Liquidation of Government Debt

Author: Ms.Carmen Reinhart

Publisher: International Monetary Fund

Published: 2015-01-21

Total Pages: 47

ISBN-13: 1498338380

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High public debt often produces the drama of default and restructuring. But debt is also reduced through financial repression, a tax on bondholders and savers via negative or belowmarket real interest rates. After WWII, capital controls and regulatory restrictions created a captive audience for government debt, limiting tax-base erosion. Financial repression is most successful in liquidating debt when accompanied by inflation. For the advanced economies, real interest rates were negative 1⁄2 of the time during 1945–1980. Average annual interest expense savings for a 12—country sample range from about 1 to 5 percent of GDP for the full 1945–1980 period. We suggest that, once again, financial repression may be part of the toolkit deployed to cope with the most recent surge in public debt in advanced economies.

Economics of Sovereign Wealth Funds
Economics of Sovereign Wealth Funds

Author: Mr.Udaibir S. Das

Publisher: International Monetary Fund

Published: 2010-12-09

Total Pages: 330

ISBN-13: 1589069277

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The book covers a wide range of topics of relevance to policymakers in countries that have sovereign wealth funds (SWFs) and those that receive SWF investments. Renowned experts in the field have contributed chapters. The book is organized around four themes: (1) the role and macrofinancial linkages of SWFs, (2) institutional factors, (3) investment approaches and financial markets, and (4) the postcrisis outlook. The book also discusses the challenges facing sovereign wealth funds in the coming years, from an inside perspective on countries, including Canada, Chile, China, Norway, Russia, and New Zealand. Economics of Sovereign Wealth Funds will contribute to a further understanding of the nature, strategies and behavior of SWFs and the environment in which they operate, as their importance is likely to grow in the coming years.

Macroeconomics for Professionals
Macroeconomics for Professionals

Author: Leslie Lipschitz

Publisher: Cambridge University Press

Published: 2019-01-23

Total Pages: 312

ISBN-13: 1108568467

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Understanding macroeconomic developments and policies in the twenty-first century is daunting: policy-makers face the combined challenges of supporting economic activity and employment, keeping inflation low and risks of financial crises at bay, and navigating the ever-tighter linkages of globalization. Many professionals face demands to evaluate the implications of developments and policies for their business, financial, or public policy decisions. Macroeconomics for Professionals provides a concise, rigorous, yet intuitive framework for assessing a country's macroeconomic outlook and policies. Drawing on years of experience at the International Monetary Fund, Leslie Lipschitz and Susan Schadler have created an operating manual for professional applied economists and all those required to evaluate economic analysis.

Financial Crises Explanations, Types, and Implications
Financial Crises Explanations, Types, and Implications

Author: Mr.Stijn Claessens

Publisher: International Monetary Fund

Published: 2013-01-30

Total Pages: 66

ISBN-13: 1475561008

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This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Foundations of European Central Bank Policy
Foundations of European Central Bank Policy

Author: Wolfgang Gebauer

Publisher: Springer Science & Business Media

Published: 2013-03-09

Total Pages: 252

ISBN-13: 3642503020

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European central bank policy is already taking place today in an informal way. It comprises, in short, European exchange rate management and interest rate policy decisions within and without the European Monetary System (EMS). A focal point of such policy actions are the money market operating targets of European Central Banks. Those central bank policies appear to be dominated, however, by the Deutsche Bundesbank. This has caused recurring critical discussion of European asymmetries and German leadership in monetary stabilization pOlicies, before and after the EMS turbulences of September 1992. However, it should be pointed out that German dominance has increasingly evolved in a cooperative way, ever since the Committee of European Central Bank Governors began to meet regularly in 1964; the Basle-Nyborg accord of 1987 formed a further stage of cooperative efforts within the EMS. Presently, a small group of countries (including Benelux and Austria) generally follows, after prior 'concertation', German monetary policy patterns. In this narrow sense, there exists a European central bank policy within a "Deutsche-Mark-Zone". In a broader sense, European central bank policy is shaped, after proper consultation, by monetary cooperation between the larger EMS countries, but once again dominantly influenced by Germany; recent problems of highjnterest rates in France and elsewhere due to (relative) restrictive German monetary pOlicies are striking examples. German monetary dominance, in the narrow or broad sense, obviously creates, in the long-run, an untenable situation in the eyes of European partner countries.

Public Debt and Economic Growth
Public Debt and Economic Growth

Author: Alfred Greiner

Publisher: Springer Science & Business Media

Published: 2009-07-24

Total Pages: 148

ISBN-13: 3642017452

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Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain further evidence on sustainability of public debt. In order to allow for time varying coefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment and for unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios.

Market Failure in Training?
Market Failure in Training?

Author: David Stern

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 235

ISBN-13: 3642769861

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The papers in this volume were fIrst presented at a symposium on "An Expanded Public Role in Job Training? The Issue of Market Failure in the Provision of Training. " The symposium took place in May, 1989. It was sponsored by the LaFollette Institute of Public Affairs at the University of Wisconsin, Madison. JozefRitzen, then in Madison on leave from Erasmus University in the Netherlands, organized the symposium. Subsequently he became Minister of Education and Science for the Netherlands. He asked David Stern to fInish the work of editing the papers for publication. All the papers have been revised in light of comments by discussants at the symposium, as well as subsequent comments by the editors and outside reviewers. INTRODucrroN AND OVERVIEW Jozef M. M. Ritzen Erasmus University Rotterdam Minister of Education and Science The Netherlands David Stem School of Education University of California, Berkeley Two factors are contributing to an increased interest in the training of adult employees. First, there is the present high rate of change in the technologies embodied in products and in production processes. This enhances the negative effect of the undersupply of training on economic growth. Higher levels of training would provide a more fertile environment for technological change. The second factor is the aging of the population.