Global Waves of Debt: Causes and Consequences

Köse, M. Ayhan; Nagle, Peter; Ohnsorge, Franziska; Sugawara, Naotaka

doi:10.1596/978-1-4648-1544-7

Cited by 106 publications

(90 citation statements)

References 240 publications

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“…19 Full recovery from the pandemic will not necessarily occur quickly, and certainly the huge public debt overhang is likely to persist for some considerable time. It is crucial that states do not then seek to reduce debt levels through another round of fiscal austerity (Kose et al, 2020), given the enormous damage to public services, especially in less prosperous regions, cities and localities, wrought by the austerity programmes pursued in the decade following the Global Financial Crisis.…”

Section: Resetting Capitalism: Building Forward Bettermentioning

confidence: 99%

Rebuilding the economy from the Covid crisis: time to rethink regional studies?

Martin

2021

Regional Studies, Regional Science

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The Covid-19 pandemic is the latest in a series of cascading crises of global capitalism that have both exposed and intensified a systemic problem of social and regional inequality that has in fact been unfolding in the advanced economies for more than four decades. There are growing calls for 'rebuilding back better' from the pandemic, for redesigning capitalism to make it more equitable and sustainable. This paper argues that regional studies has a key role to play in shaping and informing such an agenda, but that to do so requires a rethinking of our research priorities, theoretical frameworks and normative commitments. As part of such a rethinking, the paper calls for a progressive-melioristic turn in regional studies, for a transformative vocation committed to the pursuit of equitable and just regional outcomes.

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Section: Resetting Capitalism: Building Forward Bettermentioning

confidence: 99%

Rebuilding the economy from the Covid crisis: time to rethink regional studies?

Martin

2021

Regional Studies, Regional Science

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“…A spotlight on China. As Kose et al (2020) highlighted in their analysis of "global debt waves," debt accumulation in China accounts for around 80% of total average EMDEs' debt rise above the third wave, which preceded the GFC and predominantly consisted of private debt. According to the global debt monitor, non-financial corporations' debt in China is largely driving the 230% soar in EM debt-to-GDP ratio in 2020 (Tiftik and Mahmood, 2020).…”

Section: Emerging Markets and Developing Economiesmentioning

confidence: 99%

External debt vulnerability in emerging markets and developing economies during the COVID-19 shock

El-Khishin

Mohieldin

2021

REPS

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Purpose This paper aims to assess to what extent the COVID-19 shock is expected to create a debt crisis in emerging markets and developing economies (EMDEs) through two main questions: what are the main determinants of EMDEs external vulnerability? How vulnerable are EMDEs to the current COVID-19 shock compared to the global financial crisis (GFC)? Design/methodology/approach In addition to a descriptive analysis of the determinants of EMDEs external vulnerability, this paper designs two sub-indices of overindebtedness and financial fragility that capture EMDEs’ distinct characteristics. The two sub-indices together illustrate the overall external vulnerability to the current shock. Findings EMDEs are more vulnerable compared to the GFC era. Current debt threats arise mainly from debt architecture and the domination of volatile debt forms – primarily foreign currency-denominated bonds. Excessive fear of debt-deflation spirals after the GFC prompted EMDEs to expand their growth trajectories through a pattern of cheap private lending, loose measures and unmonitored fiscal expansion. Research limitations/implications Conclusive post-crisis data are still unavailable. Practical implications EMDEs need to balance between temporary accommodative measures and a post-shock policy mix that prevent a deflation spiral without worsening indebtedness and financial fragility. Moreover, financial prudence in face of growing credit demand is crucial, particularly in light of the monetary expansion and injected liquidity. Originality/value The indices offer a framework for examining external vulnerability in EMDEs based on theoretical and historical revisions, IMF benchmarks and EMDEs specific debt characteristics. The indices components can be offered for empirical examination in separate future research once conclusive data become available.

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“…Good debt management and accountability can help cut borrowing costs, improve debt sustainability and reduce fiscal risks (Kose et al, 2020). Since borrowed funds were normally transferred to uses that did not increase export profits, productivity, or potential output.It has led many researchers to question the acquisition of debt with implicit findings.…”

Section: Empirical Reviewmentioning

confidence: 99%

“…Whilst most of the fastest-growing businesses are usually funded predominantly with equity. Kose et al (2020) suggest debt accountability and efficient debt management can help minimize funding rates. And further states it could improve debt sustainability as well as mitigate fiscal risks.…”

Section: Introductionmentioning

confidence: 99%

The impact of Debt Financing on Performance of Small and Medium Enterprises in Ghana

Ophelia¹,

Min²,

Aliou³

et al. 2021

IJAERS

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Small and Medium Enterprises (SMEs) are an essential part in the growth of the economy and industry as a whole. But in the long run, capital is needed to boost their performance hence the need to finance their operations primarily through debt. The scare research on debt financing of SMEs leads to the purpose of this study to analyze the impact of debt financing on SMEs performance in Ghana. The SMEs sample used for the analysis was taken from Ghana Stock Exchange (GSE) database, which has forty-two (42) companies listed. It contains a comprehensive array of financial statements and balance sheets for companies active in Ghana. For the purpose of the study, 8 SMEs were selected based on their stated capital of not less than GHC 300,000. A five-year time frame financial account reports from 2015 -2019 consecutive year period were used for this study. Also, the study hypothesis was tested using multiple regression analysis. From the results of the study, debt-financed through both short and long term have a detrimental impact on SMEs' financial performance. With the intention to destitute credit and loan control policies, the study recommends that SMEs utilize their debt significantly. The diversification of their revenue streams, is essential to amateur down payment modes for trade credits and practice proper financial bookkeeping records. It is also suggested that transparency in payment schedules and necessity of training their employees on a regular basis.

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Global Waves of Debt: Causes and Consequences

Cited by 106 publications

References 240 publications

Rebuilding the economy from the Covid crisis: time to rethink regional studies?

Rebuilding the economy from the Covid crisis: time to rethink regional studies?

External debt vulnerability in emerging markets and developing economies during the COVID-19 shock

The impact of Debt Financing on Performance of Small and Medium Enterprises in Ghana

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