Found 25 article(s) for author 'Debt'

Understanding the Political Economy of the Eurozone Crisis: A Political Scientist’s Guide

Understanding the political economy of the Eurozone crisis: A Political Scientist’s Guide. Jeffry Frieden, 2017, Paper, “The Eurozone crisis constitutes a grave challenge to European integration. This essay presents an overview of the causes of the crisis, and analyzes why has it been so difficult to resolve. It focuses on how responses to the crisis were shaped by distributive conflicts both among and within countries. On the international level, debtor and creditor countries have fought over the distribution of responsibility for the accumulated debt; countries with current account surpluses and deficits have fought over who should implement the policies necessary to reduce the current account imbalances.Link

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The Perils of Debt Complacency

The Perils of Debt Complacency. Carmen Reinhart, September 28, 2016, Opinion, ““What a government spends the public pays for. There is no such thing as an uncovered deficit.” So said John Maynard Keynes in A Tract on Monetary Reform.  But Robert Skidelsky, the author of a magisterial three-volume biography of Keynes, disagrees. In a recent commentary entitled “The Scarecrow of National Debt,” Skidelsky offered a rather patronizing narrative, in a tone usually reserved for young children and pets, about his aged, old-fashioned, and financially illiterate friend’s baseless anxiety about the burden placed on future generations by the rising level of government debt.Link

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Reforms to Spark Economic Growth

Reforms to Spark Economic Growth. Martin Feldstein, September 13, 2016, Video, “Harvard University Professor Martin Feldstein discusses the prospect for stimulus spending in a Donald Trump presidency and examines the state of the U.S. economy, with a focus on debt-to-GDP, productivity, and the reforms he sees as essential for economic growth. He speaks on “Bloomberg ‹GO›.”Link

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Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya

Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya. Michael Kremer, July 18, 2016, Paper, “We examine the potential of asset-collateralized loans in low-income country credit markets. When a Kenyan dairy cooperative exogenously replaced high down payments and joint liability requirements with loans collateralized by the asset itself – a large water tank- loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements for deposit requirements had no impact on loan take up. There were no repossessions among farmers allowed to collateralize 75% of their loans, and a 0.7% repossession rate among those offered 96% asset collateralization. A Karlan-Zinman test based on waiving borrowing requirements ex post finds evidence of adverse selection with very low deposit requirements, but not of moral hazard.Link

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A Debt Agenda for the G7

A Debt Agenda for the G7. Martin Feldstein, May 23, 2016, Opinion. “On May 26-27, the heads of the Group of Seven leading industrial countries will gather in Japan to discuss common security and economic problems. A major common problem that deserves their attention is the unsustainable increase in the major developed countries’ national debt. Failure to address the explosion of government borrowing will have adverse effects on the global economy and on debt-burdened countries themselves.Link

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A Model of Credit Market Sentiment

A Model of Credit Market Sentiment. Robin Greenwood, Samuel Hanson, March 24, 2016, Paper. “We present a model of credit market sentiment in which investors form beliefs about future creditworthiness by extrapolating past defaults. Our key contribution is to model the endogenous two-way feedback between credit market sentiment and credit market outcomes. This feedback arises because investors’ beliefs depend on past defaults, but beliefs also drive future defaults through investors’ willingness to refinance debt. Our model is able to capture many documented features of credit booms and busts, including the link between credit growth and future returns, and the “calm before the storm” periods in which fundamentals have deteriorated but the credit market has not yet turned.Link

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It Could be Too Late to Avoid Catastrophe in Venezuela

It Could be Too Late to Avoid Catastrophe in Venezuela. Ricardo Hausmann, February 3, 2016, Opinion. “As markets brace themselves for the negative effects of the decline in oil prices, Venezuela will probably be the first big domino to fall. Domestically, the most likely scenario is an imminent economic collapse and a humanitarian crisis. Internationally, it will imply the largest and messiest emerging market sovereign default since the Argentine crisis of 2001. The situation is made worse by the inability of the political system, at present, to address the situation.Link

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Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015

Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015. Carmen Reinhart, January 3, 2016, Paper, “Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises …Link

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Yuan Devaluation Necessary Step for China, Reinhart Says

Yuan Devaluation Necessary Step for China, Reinhart Says. Carmen Reinhart, August 12, 2015, Video, “Carmen Reinhart, an economist at Harvard University’s Kennedy School of Government, talks about the devaluation of the Chinese yuan and its impact on financial markets, currencies and the global economy. Reinhart, speaking with Betty Liu and Pimm Fox on Bloomberg Television’s “Bloomberg Markets,” also discusses commodity price cycles, Chinese lending to emerging-market economies and Federal Reserve policy.Link

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