1/6
Very good piece by @danielmunevar on the post-Covid-19 dynamics of developing-country debt. It uses Minsky's balance-sheet approach to understand the implications of rising debt among developing countries and the systemic impact on...
eurodad.org/2020_debt_cris…
Very good piece by @danielmunevar on the post-Covid-19 dynamics of developing-country debt. It uses Minsky's balance-sheet approach to understand the implications of rising debt among developing countries and the systemic impact on...
eurodad.org/2020_debt_cris…
2/6
the borrowers themselves. It also discusses the adverse systemic implications for the advanced economies.
The world "systemic" is key here. It is useless to treat the question of developing-country debt as a series of linear increments that matters mostly to the...
the borrowers themselves. It also discusses the adverse systemic implications for the advanced economies.
The world "systemic" is key here. It is useless to treat the question of developing-country debt as a series of linear increments that matters mostly to the...
3/6
individual country in distress. Debt repayments always affect a country's balance of payments, which in turn must be absorbed by the rest of the world. One of the important points that Munevar makes is that while debt forbearance has a charity component, it turns out to...
individual country in distress. Debt repayments always affect a country's balance of payments, which in turn must be absorbed by the rest of the world. One of the important points that Munevar makes is that while debt forbearance has a charity component, it turns out to...
4/6
be a very self-interested piece of charity. It benefits creditor economies as much as it benefits the obligors, and in ways that are not especially hard to understand.
As I pointed out in an earlier tweet, we used to know this. As Marriner Eccles (FDR's fed Chairman)...
be a very self-interested piece of charity. It benefits creditor economies as much as it benefits the obligors, and in ways that are not especially hard to understand.
As I pointed out in an earlier tweet, we used to know this. As Marriner Eccles (FDR's fed Chairman)...
5/6
pointed out in his brilliant 1933 Senate Hearings: "We must choose either between accepting sufficient foreign goods to pay the foreign debts owing to this country, or cancel the debts. This is not a moral problem, but a mathematical one."
fraser.stlouisfed.org/files/docs/mel…
pointed out in his brilliant 1933 Senate Hearings: "We must choose either between accepting sufficient foreign goods to pay the foreign debts owing to this country, or cancel the debts. This is not a moral problem, but a mathematical one."
fraser.stlouisfed.org/files/docs/mel…
6/6
Developing-country debt is quite clearly one of the things my friend Michele @wucker labels a "gray rhino". We know what it is and we pretty much know how it is going to hurt us if we just wait around.
Developing-country debt is quite clearly one of the things my friend Michele @wucker labels a "gray rhino". We know what it is and we pretty much know how it is going to hurt us if we just wait around.
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