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Global Waves of Debt

Author

Listed:
  • M. Ayhan Kose
  • Peter Nagle
  • Franziska Ohnsorge
  • Naotaka Sugawara

Abstract

The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market 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 that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Suggested Citation

  • M. Ayhan Kose & Peter Nagle & Franziska Ohnsorge & Naotaka Sugawara, 2021. "Global Waves of Debt," World Bank Publications - Books, The World Bank Group, number 32809, April.
    • Handle: RePEc:wbk:wbpubs:32809
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    Citations

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    Cited by:

    1. M. Ayhan Kose & Peter Nagle & Franziska Ohnsorge & Naotaka Sugawara, 2021. "What has been the impact of COVID-19 on debt? Turning a wave into a tsunami," CAMA Working Papers 2021-99, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Giselle Datz, 2021. "Ties that bind and blur: financialization and the evolution of sovereign debt as private contract," Review of Evolutionary Political Economy, Springer, vol. 2(3), pages 571-587, December.
    3. Kose, M. Ayhan & Sugawara, Naotaka & Terrones, Marco E., 2020. "Global Recessions," MPRA Paper 98608, University Library of Munich, Germany.
    4. Alice Nicole Sindzingre, 2021. "Truth vs justification: contrasting heterodox and mainstream thinking on development via the example of austerity in Africa," Working Papers hal-03139457, HAL.
    5. Ohnsorge, Franziska & Kose, M. Ayhan & Sugawara, Naotaka, 2020. "Benefits and Costs of Debt: The Dose Makes the Poison," CEPR Discussion Papers 14439, C.E.P.R. Discussion Papers.
    6. Kolluru Mythili & Hyams-Ssekasi Denis & Rao K.V.Ch.Madhu Sudhana, 2021. "A Study of Global Recession Recovery Strategies in Highly Ranked GDP EU Countries," Economics, Sciendo, vol. 9(1), pages 85-105, June.
    7. Halebić Jasmin & Moćević Amina, 2020. "Analysis of Public Debt at Subnational Government Levels: Evidence from Cantons in the Federation of Bosnia and Herzegovina," South East European Journal of Economics and Business, Sciendo, vol. 15(2), pages 109-123, December.
    8. Martin Sokol & Leonardo Pataccini, 2020. "Winners And Losers In Coronavirus Times: Financialisation, Financial Chains and Emerging Economic Geographies of The Covid‐19 Pandemic," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 401-415, July.
    9. Dieppe,Alistair Matthew & Francis,Neville Ricardo & Kindberg-Hanlon,Gene, 2021. "Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies," Policy Research Working Paper Series 9525, The World Bank.
    10. Donato Masciandaro, 2020. "Covid-19 Helicopter Money, Monetary Policy And Central Bank Independence: Economics And Politics," BAFFI CAREFIN Working Papers 20137, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    11. José Ramón Martínez Resano & Sonsoles Gallego, 2021. "G20 debt-relief initiatives for low-income countries during the pandemic," Economic Bulletin, Banco de España, issue 3/2021.
    12. Feyen,Erik H.B. & Dancausa,Fernando & O'Reilly Gurhy,Bryan & Nie,Owen, 2020. "COVID-19 and EMDE Corporate Balance Sheet Vulnerabilities : A Simple Stress-Test Approach," Policy Research Working Paper Series 9324, The World Bank.
    13. Eiji Fujii, 2020. "Currency Portfolio of External Debt, Exchange Rate Cyclicality, and Consumption Volatility," CESifo Working Paper Series 8287, CESifo.
    14. Keston K. Perry, 2021. "Financing a Global Green New Deal: Greening Capitalism or Taming Financialization for a New ‘Civilizing’ Multilateralism?," Development and Change, International Institute of Social Studies, vol. 52(4), pages 1022-1044, July.
    15. M. Ayhan Kose & Peter S. O. Nagle & Franziska Ohnsorge & Naotaka Sugawara, 2020. "Can This Time Be Different? Policy Options in Times of Rising Debt," Koç University-TUSIAD Economic Research Forum Working Papers 2008, Koc University-TUSIAD Economic Research Forum.
    16. Donato Masciandaro, 2020. "Ecb Helicopter Money: Economic And Political Economy Arithmetics," BAFFI CAREFIN Working Papers 20138, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    17. Ligang Song & Yixiao Zhou, 2020. "The COVID‐19 Pandemic and Its Impact on the Global Economy: What Does It Take to Turn Crisis into Opportunity?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(4), pages 1-25, July.
    18. Gegenfurtner, Dennis Andreas, 2021. "The causes of Original Sin: An empirical investigation of emerging market and developing countries," IPE Working Papers 174/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    19. Dieppe,Alistair Matthew & Kilic Celik,Sinem & Okou,Cedric Iltis Finafa, 2020. "Implications of Major Adverse Events on Productivity," Policy Research Working Paper Series 9411, The World Bank.
    20. Carrera, Jorge & de la Vega, Pablo, 2021. "The impact of income inequality on public debt," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    21. Sindzingre, Alice, 2021. "Truth vs. justification: Contrasting heterodox and mainstream thinking on development via the example of austerity in Africa," IPE Working Papers 155/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    22. Dumitriu Ramona & Stefanescu Razvan, 2020. "Improving IMF’s Reputation in the Context of COVID-19," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 230-238.
    23. Carlos Cantú & Michael Chui, 2020. "Financial market development and financial stability," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial market development, monetary policy and financial stability in emerging market economies, volume 113, pages 19-38, Bank for International Settlements.

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