Global Waves of Debt: Causes and Consequences

By M. Ayhan Kose, P. Nagle, F. Ohnsorge, Naotaka Sugawara. 2021

148 citations recorded by the source corpus.

ADVANCE EDITION OF BOOK EXPECTED IN 2020. The global economy has experienced four waves of debt accumulation over the past fifty years. The first three debt waves ended with financial crises in many emerging and developing economies. The latest, since 2010, has already witnessed the largest, fastest and most broad-based increase in debt in these economies. Their total debt has risen by 54 percentage points of GDP to a historic peak of almost 170 percent of GDP in 2018. Current low interest rates mitigate some of the risks associated with high debt. However, emerging 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 of the current debt wave ending in crisis and, if crises were to take place, alleviate their impact. To shed light on the implications of the rapid debt accumulation, Global Waves of Debt presents the first in-depth analysis of the main features of global and national debt accumulation episodes, analyzes the linkages between debt accumulation and financial crises, and draws policy lessons.

Subfields: Finance

View Paper: https://www.semanticscholar.org/paper/dd4217973516d84fe9edc003a300cae2e7e15665

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Citations in the corpus

• The COVID‐19 Pandemic and Its Impact on the Global Economy: What Does It Take to Turn Crisis into Opportunity? (2020, background): “Rising Debt and The Inability of Monetary Policy to Stimulate Growth May Cause Financial Fragility Prior to the outbreak of COVID-19, there has been a wave of growing global debt since the GFC (Kose et al., 2020).”