From financial crash to debt crisis

Carmen M Reinhart interviewed by Romesh Vaitilingam, 9 Apr 2010

Carmen Reinhart of the University of Maryland talks to Romesh Vaitilingam about the sequencing of the cycle of debt build-ups – from private debt surges to banking crises to sovereign debt crises – and the four ‘deadly D’s’ that once again threaten many governments as a consequence of the current crisis – deficits, debt, downgrade and default. The interview was recorded at the Royal Economic Society’s annual conference at the University of Surrey in March 2010.

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Topics: Financial markets, Global crisis, Macroeconomic policy
Tags: banking crises, debt, sovereign debt

Fiscal adjustment and growth: Beware of the credit constraints

Emanuele Baldacci, Sanjeev Gupta, Carlos Mulas-Granados, 31 March 2014

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In the aftermath of the recent financial crisis, the discussion of the effects of fiscal adjustment on economic growth has intensified. While some scholars have focused on the characteristics of the fiscal consolidation needed to bring public debt down from historically high levels, others have examined the effects of alternative strategies on economic performance.

Topics: Financial markets, Macroeconomic policy
Tags: austerity, credit constraints, debt, deleveraging, financial crisis, fiscal consolidation, fiscal policy

Delivering the Eurozone ‘Consistent Trinity’

Marco Buti, Maria Demertzis, João Nogueira Martins, 30 March 2014

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As argued in an earlier commentary, the financial crisis exposed important economic inconsistencies in the way that EMU operated.1 Although progress has been made, the reality is that more needs to be done.

Topics: Europe's nations and regions, Macroeconomic policy
Tags: banking union, debt, EMU, euro, eurozone, Eurozone crisis, fiscal consolidation, fiscal policy, imbalances, internal devaluation, Stability and Growth Pact, structural reforms

Privatisation and debt: Lessons from Greece’s fiasco

Paolo Manasse, 31 January 2014

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In the midst of the European debt crisis, it is tempting to think that high-debt countries could alleviate the recessionary impact of the budget-consolidation process by selling (poorly managed) assets and stakes in their state-owned enterprises (SOEs), and by using the proceeds to buy back their debts (Hope 2011).

Topics: Financial markets, International finance
Tags: debt, European sovereign debt crisis, Greece, privatisation, sovereign debt

Greater inequality and household borrowing? New evidence from household data

Olivier Coibion, Yuriy Gorodnichenko, Marianna Kudlyak, John Mondragon, 29 January 2014

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The financial crisis of 2008–09 was preceded by an exceptional rise in borrowing by US households, accounted for primarily by a rise in mortgage debt. There are two main views about the source of this ‘great leveraging’:

Topics: Financial markets, Poverty and income inequality
Tags: credit rationing, debt, Inequality, subprime mortgage crisis, US

Catenarian fiscal discipline

Hans Gersbach, 4 January 2014

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Limiting the accumulation of public debt in democracies has always been a problem, but it has become a particularly pressing one in the last few decades.

Topics: Macroeconomic policy
Tags: debt, democracy, fiscal discipline, fiscal policy, time inconsistency

Public debt and economic growth: There is no ‘tipping point’

Markus Eberhardt, Andrea F Presbitero, 17 November 2013

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The presence of a common threshold, or ‘tipping point’ – beyond which the detrimental impact of debt on growth is significant, or significantly increases – is currently taken as given in many policy circles.

Topics: Macroeconomic policy
Tags: austerity, debt, growth

The Scottish question

Angus Armstrong, Monique Ebell, 26 October 2013

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In less than one year, on 18 September 2014, the Scottish electorate will vote on a question of historic significance – should Scotland remain in the UK, or should it become an independent country?

Topics: Europe's nations and regions, Macroeconomic policy
Tags: Currency unions, debt, independence, Scotland, sterling

Sovereigns versus banks: Crises, causes and consequences

Òscar Jordà, Moritz Schularick, Alan Taylor, 18 October 2013

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Some observers – often with great conviction – see the European crisis through the lens of public finance (Alessandrini et al. 2012). They see the key source of the problem as the inherent inability of past governments (many in the periphery, and possibly soon even some in the core) to live within their means.

Topics: Economic history, Financial markets, Macroeconomic policy
Tags: business cycles, debt, financial crises, fiscal space

The IMF and the legacy of the euro crisis

Susan Schadler, 15 October 2013

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The IMF will live with the legacy of its role in the European debt crisis for years — if not decades.

Topics: Global governance, International finance
Tags: debt, EZ crisis, IMF

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