Benefits and Costs of Debt : The Dose Makes the Poison

Kose, M. Ayhan ; Ohnsorge, Franziska ; Sugawara, Naotaka

World Bank, Washington, DC

关键词: DEBT SUSTAINABILITY;    FISCAL POLICY;    FISCAL TRENDS;    FISCAL BALANCE;    GOVERNMENT DEBT;   

DOI  :  10.1596/1813-9450-9166
RP-ID  :  WPS9166

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Government debt has risen substantiallyin emerging market and developing economies (EMDEs) sincethe global financial crisis. The current environment of lowglobal interest rates and weak growth may appear to mitigateconcerns about elevated debt levels. Considering currentlysubdued investment, additional government borrowing mightalso appear to be an attractive option for financinggrowth-enhancing initiatives such as investment in human andphysical capital. However, history suggests caution. Despitelow interest rates, debt was on a rising trajectory in halfof EMDEs in 2018. In addition, the cost of rolling over debtcan increase sharply during periods of financial stress andresult in financial crises; elevated debt levels can limitthe ability of governments to provide fiscal stimulus duringdownturns; and high debt can weigh on investment andlong-term growth. Hence, EMDEs need to strike a carefulbalance between taking advantage of low interest rates andavoiding the potentially adverse consequences of excessivedebt accumulation.