Can This Time Be Different? Policy Options in Times of Rising Debt

Kose, M. Ayhan ; Nagle, Peter S.O ; Ohnsorge, Franziska L. ; Sugawara, Naotaka

World Bank, Washington, DC

关键词: FINANCIAL CRISIS;    CURRENCY CRISIS;    DEBT CRISIS;    DEBT SUSTAINABILITY;    PUBLIC DEBT;   

DOI  :  10.1596/1813-9450-9178
RP-ID  :  WPS9178

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Episodes of debt accumulation have beena recurrent feature of the global economy over the pastfifty years. Since 2010, emerging and developing economieshave experienced another wave of historically large andrapid debt accumulation. Similar past debt buildups haveoften ended in widespread financial crises in theseeconomies. This paper examines the factors that are likelyto determine the outcome of the most recent debt wave, andconsiders policy options to help reduce the likelihood thatit ends again in widespread crises. It reports two mainresults. First, the rapid increase in debt has made emergingand developing economies more vulnerable to shifts in marketsentiment, notwithstanding historically low global interestrates. Second, policy options are available to lower thelikelihood of financial crises, and to help manage theadverse impacts of crises when they do occur. These includesound debt management, strong monetary and fiscalframeworks, and robust bank supervision and regulation. Thepost-crisis debt buildup has coincided with a period ofsubdued growth as well as the emergence of non-traditionalcreditors. As a result, policy priorities also need toensure that debt is spent on productive purposes to improvegrowth prospects and that all debt-related transactions aretransparently reported.