Europe’s Debt Crisis, Coordination Failure, and International Effects

Abstract

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Determinants of External Debt: The Case of Malaysia

“…As part of the future development, a country can invest in projects with long-term returns, even when the resources are not available domestically. For most of the least-developed countries, the primary challenge exists in the acquisition of the initial capital requirements, even when the net present value indicates the viability of the project (Collignon, 2012). External debt is key in developing international relations and facilitating global interdependence.…”

Modern Financial Crises

“…As note, achieving the dual policy goals of solving a current crisis while trying also to prevent the next one-and using the same policy tools to do both-is rarely easy. Collignon (2012) agrees that the crisis is due partly to fundamental economic developments, such as growth and competitiveness, and partly to uncooperative behavior between the main policymakers in Europe. Also Orphanides (2014) explores the dominant role of politics in decisions made by euro area governments during the crisis and discusses decisions that appear to have been driven by local political considerations to the detriment of the euro area as a whole.…”

Towards a Genuine Economic and Monetary Union

“…The credit crunch then contracts the economy. Furthermore, if a large number of banks shrink their assets simultaneously by dumping the same kind of securities, as happened after the US crisis in 2007/2008 or during the Greek crisis, the price of these securities can drop sharply (for evidence see Collignon, 2012c). This affects all balance sheets negatively, first of all of course in the banking sectors, but also for corporations and households.…”