All final products and services generated by a country in a given year are counted toward GDP. According to this concept, one must estimate the GDP by calculating the entire quantity of spending in the economy. It’s also possible to use the expenditure method to calculate GDP, which takes into account both private and public spending on durable and nondurable goods and services, as well as gross private investment (which includes fixed assets such as buildings and equipment) and net personal consumption (which excludes transfer payments such as Social Security) plus net private investment.
It is important to recognize that the components that make up GDP are difficult to comprehend in a way that permits an accurate assessment of the acceptable national debt level given this broad definition. To put it another way, the national debt may not be accurately represented by the debt-to-GDP ratio.
Because of this, comparing the national debt’s interest expense to specific governmental services like education, military, and transportation is a more straightforward approach. Comparing debt in this way makes it possible for citizens to assess the relative weight of the national budget’s debt load.
Why is national debt a problem?
Congress has allowed deficit spending and tax cuts to continue, which has resulted in a massive increase in the country’s debt. It is possible that the world economy may suffer if the United States cannot pay back its debts if no action is taken.
What impact does the national debt have on society?
Because of the rising pressure on interest rates caused by budget deficits, excessive government borrowing may “crowd out” private investment.
There is less money for everyone else when the government borrows a lot of money, and interest rates rise. Even with the higher interest rates, some private borrowers may not be able to afford them. Interest rates are affected by a variety of factors, including the economy’s development and forecasts for inflation.
What are five ways the national debt can affect the economy?
However, the inverse is equally true if we do not act. Without addressing our long-term fiscal difficulties, our economic climate would deteriorate due to a loss of confidence, less access to capital, increased interest costs, worsening growth circumstances, and an increased danger of economic calamity for our country. As a result, our future economy will be smaller, with fewer economic prospects for individuals and families and less fiscal flexibility to respond to future crises.
Privatization and Decreased Taxation Government spending on interest charges will continue to rise as the federal debt grows, reducing the amount of money available for public investments. The Congressional Budget Office (CBO) predicts that existing legislation will result in interest charges of $5.4 trillion over the next decade. Over $900 million is spent on interest payments every day in the United States.
There will be a decrease in the federal government’s ability to invest in sectors that are critical to economic growth as more federal funds are spent on interest payments. Interest rates are now low to aid the economy’s recovery, but we cannot expect that to continue indefinitely due to the epidemic. A rise in interest rates will have a significant impact on the federal government’s ability to borrow. Federal interest expenditures are expected to account for more than half of all federal spending by 2030, according to the CBO “program” and more than three times what the federal government has previously spent on R&D, non-defense infrastructure, and education combined.
The amount of private investment has decreased. As a result, interest rates rise and new corporate equipment and structures are less likely to be invested as a result of the competition for federal borrowing on the capital markets. As a result of the rising costs of funding, entrepreneurs risk limiting progress toward life-improving technologies. Investors may begin to distrust the government’s ability to repay its debt and demand even higher interest rates, which would further increase the cost of borrowing for businesses and households. Eventually, a lack of confidence and a lack of investment would have a negative impact on the earnings and productivity of American employees.
Americans face a shrinking array of economic opportunities. Economic chances for all Americans are directly affected by an increase in debt. High amounts of debt would reduce the amount of capital goods that people could use in their occupations, resulting in decreased productivity and lower earnings. The CBO estimates that by 2050, income per person may rise by as much as $6,300 if the government debt is reduced to 79 percent of the economy.
As a result, the economy’s future will be impacted by excessive debt levels. Increased federal borrowing, for example, would make it more difficult for families to buy homes, finance auto payments, or pay for education loans. Workers will be unable to keep up with the demands of a more technology-based, global economy if there are fewer educational and training possibilities. Lack of funding for R&D would make it more difficult for American companies to stay on the cutting edge of innovation and would have a negative impact on wage growth in the US. Economic slowdown would exacerbate our fiscal woes, as lower incomes lead to a smaller tax base and a more out-of-balance government budget. Support for people in need would be threatened by increased budgetary pressures on vital safety net services.
The likelihood of a financial crisis is rising. Interest rates on government borrowing could climb if investors lose trust in the nation’s fiscal position, as greater yields would be required to purchase such securities. An increase in Treasury rates could lead to higher inflation, which would lower the value of outstanding government securities and cause holders of those securitiesincluding mutual funds, pension funds, insurance companies, and banksto lose money. This could further destabilize the U.S. economy and erode confidence in the American dollar internationally.
Threats to the nation’s safety and stability. A strong economy is essential for our national security and our capacity to retain a global leadership position. As ex-Joint Chiefs of Staff Chairman Admiral Mullen put it: “It is our debt that poses the greatest threat to our national security. ” As our national debt rises, we are less able to invest in our own strength and become more reliant on foreign creditors.
Putting the safety net in jeopardy. The safety net and the most vulnerable in our society are under jeopardy because of America’s huge debt. Essential programs and the people who rely on them are at peril if our government lacks the resources and stability of a long-term budget.
What happens if United States defaults on debt?
The government would be unable to borrow extra funds to meet its obligations, including interest payments to bondholders, if Congress did not suspend or raise the debt ceiling. A default is almost always the result of such an event.
There is a risk that investors such as pension funds and banks that own U.S. debt could go under. Many Americans and many businesses that rely on government assistance could be adversely affected. Currency values could plummet, which would almost certainly lead to a return of recession in the United States.
This is just the beginning. Additionally, the US dollar could lose its status as the world’s major “unit of account,” which means that it is widely used in worldwide finance and trade. Americans would not be able to maintain their current standard of living if they were not granted this status.
U.S. currency depreciation and rising inflation would certainly lead to the abandoning of the dollar as a worldwide unit of account if it were to fail on its debts.
U.S. goods from abroad would become more expensive and Americans’ standard-of-living would decline as a result of these factors.
How does deficit affect the economy?
In the long run, deficits in the federal budget have a negative impact on the economy because they reduce national saving (the total amount of savings by households, firms, and governments) and hence the cash available for private investment in productive capital. long-term private investment in the United States.
What are the main consequences of deficit spending?
Deficit spending, according to some experts, might harm economic growth if left unchecked. If a government has too much debt, it may raise taxes or default on its debts.
Is the national debt a problem?
Debt levels are one of the most critical public policy concerns to address. Debt can be utilized to help a country’s long-term growth and prosperity if it is used properly. There must be a methodical way to assess the national debt, such as by comparing the interest expense paid to other government expenses or by looking at debt levels per person.
What is the effect of debt on economic growth?
The relationship between government debt and economic growth has been the focus of academics and economists over the last decade following the global financial crisis of 20072008 and the subsequent European sovereign debt crisis, which began in late 2009. Carmen Reinhart and Kenneth Rogoff, for example, released an important study in 2010 “It was frequently quoted and influential in the debate on austerity and fiscal policy for debt-burdened nations, which became generally cited and influential among commentators, academics and politicians.
We review the debt-growth literature in this policy brief, which has been published since the publication of “To examine the argument that high government debt-to-GDP ratios have negative or significant (or both) consequences on the growth rate of an economy. In addition, we examine the argument that debt has a large negative influence on growth rates when it exceeds a nonlinear threshold of roughly 90% of GDP. Many European countries have taken steps to reduce their debt to GDP ratios in recent years, and given the United States’ present budgetary trajectory, it is critical that Americans widen their understanding of the possible negative consequences of debt on growth potential.
According to the vast majority of debt-growth research, this barrier is somewhere between 75 and 100 percent of GDP. A more significant finding is that, with the exception of two studies, the quantity of public debt is negatively associated with economic growth. So even if no common threshold is discovered, this holds true. Large government debt has been shown to have a detrimental influence on economic growth potential, and this impact often becomes more obvious as the debt grows. A significant and growing public debt ratio in the United States might result in a loss of $4 trillion or $5 trillion in real GDP over the next 30 years, or as much as $13,000 per capita, by 2049, according to the present fiscal trajectory.
Why Would a Large Federal Debt Have Negative Effects on the Economy?
In order to understand how government debt affects economic growth, it is important to first examine the economic reasons why a big and growing debt burden could limit the US economy’s ability to grow. Several macroeconomic mechanisms through which debt might negatively effect medium- and long-term economic growth have been identified by economists for a long time. Debt-to-GDP ratio hikes could lead to considerably higher taxes, reduced future earnings, and intergenerational injustice, according to recent findings.
Increased long-term interest rates, greater distortionary tax rates, inflation, and a general constraint on countercyclical fiscal policies can all have a detrimental impact on capital stock accumulation and economic growth. This can lead to higher volatility and lower growth rates. The private sector appears to start dissaving when the debt-to-GDP ratio hits high levels, according to research on the routes via which debt negatively influences growth. Findings that refute the Ricardian equivalence theory, which says that households are forward-looking and raise their savings in response to a rise in government borrowing,
It is becoming increasingly difficult for the government to keep up with its massive expenditure plans as the country’s debt burden grows. In consequence, the nation’s capital markets have to compete for more government borrowing, which drives up interest rates and discourages private investment. Innovation and productivity suffer as a result of the lower growth potential of the economy as a whole due to the higher capital expenses faced by entrepreneurs in the private sector. Investors may demand even higher interest rates if the government’s debt trajectory continues to rise. Over time, this trend of crowding out private investment coupled with increased interest rates will lead to a further decline in corporate confidence and investment, which in turn reduces productivity and growth.
Increasing government borrowing has another cost, which is the crowding out of public investment in research and development, infrastructure, and education as interest payments absorb an ever bigger share of the federal budget. A CBO projection shows that interest payments on the national debt will account for about 6% of GDP by 2049, overtaking even Social Security and Medicare in importance. Due to a lack of private and public investment, Americans will have a more difficult time affording to buy a home, drive a car, or go to college. Weakened social mobility and less investment will keep the economy from reaching its full potential.
How Might Debt Drag Affect Future US Economic Growth?
The CBO publishes long-term growth forecasts for the United States every year. Two studies in our literature analysis were used to estimate real GDP growth rates for 2019 to 2049 in order to predict the detrimental consequences of large public debt on growth rates. For our forecast, we take into account the findings of Caner, Koehler-Geib, and Alfonso, as well as the work of Alfonso and Jalles. The first study found a lower debt barrier (77%) but a lesser drag on economic growth; the second study found a higher debt threshold (90%) but a somewhat larger drag. In addition, Alfonso and Jalles’ estimations are roughly in line with Kumar and Woo’s findings on the projected drag of debt.
Figure 1 shows the changes in real GDP between 2019 and 2049. On one side, we have the CBO’s baseline estimate; on the other, we have Alfonso and Jalles’ projected real GDP with debt drag effects; and on the third side, we have Caner, Grennes, and Koehler Geib’s projected real GDP with debt drag effects. A significant and growing public debt-to-GDP ratio might have a negative impact on economic growth of $45 trillion over the next 30 years, according to the findings. Between $95,339 and $82,376$86,021, this is the difference in real GDP per capita between the baseline and the debt-drag-affected real GDP per capita. The average American’s level of living is about $9,00013,000 lower in this range than in the baseline.
How will the national debt affect future generations?
With the existing statute in place, the United States has 28 percent of GDP in fiscal space now, which will fall to 13 percent by 2029. By the end of the decade, fiscal space until debt reaches record levels would be practically nonexistent under current strategy. Because of the narrowing budgetary window, it’s likely that future crises will be harder to address.
Another consideration is that a smaller fiscal buffer may make it more difficult for the government to meet future problems and possibilities. When the country’s debt is so large and potential financing sources are already needed to maintain the current fiscal situation, updating the country’s social contract, implementing a Green New Deal, or eliminating capital growth barriers is extremely difficult.
Rising Debt Places an Increased Burden on Future Generations
In the long run, the national debt is a generational concern. For young and future Americans, borrowing money to pay for tax cuts or to spend is a cost that will grow as time goes on.
If a child in the United States is born today, they will be saddled with a debt of about $50,000. Even if the debt will never have to be repaid in full, there are still expenses associated with it.
Younger and future generations are likely to bear the brunt of debt’s economic implications. Increases in borrowing rates, falling fiscal space, and diminishing revenue add up in the long run. When compared to reducing debt, CBO estimates that rising debt will cut GNP by 1% in 10 years, 2% in twenty years, and 6% in thirty years.
In addition, because of the unsustainable trajectory of the debt, today’s low taxes or excessive expenditure will need to be offset in the future to some degree. By borrowing more now, politicians are virtually guaranteeing that future taxpayers and government beneficiaries will face greater taxes and fewer spending. To put it mildly, future generations will be saddled with higher and higher rates of interest and higher levels of debt servicing.
Future generations may already be feeling the effects of higher interest rates. The federal government is expected to spend more money paying its debt obligations than it spends on all programs and financing for children by the end of next year.. The government will therefore spend more money subsidizing the consumption of previous generations than it would on investments for the future.
The United States does not need to spend the remainder of the 21st century paying for the past when there are so many unmet needs and new problems and opportunities developing.
Rising Debt Increases the Risk of a Fiscal Crisis
It is improbable that the United States will experience a fiscal crisis in the near future, but the likelihood will increase if debt continues to climb and it becomes increasingly evident that this trend will not change.
By borrowing in its own currency, the United States is less likely to become bankrupt. So far, there has been no cause for concern that the United States may default on its sovereign debt commitments because of the country’s healthy economy, stable monetary policy, stable political system, and full confidence and credit. Though there’s a chance this won’t hold. Investors will begin to doubt our creditworthiness if we continue on our current path of deficit spending, tax cuts, and a failure to prioritize.
An economic downturn can take many different shapes. The CBO predicted a debt-fueled financial disaster in a report published in 2010. In this case, investors might demand higher interest rates because of the market fear caused by rising debt levels. This rise in interest rates would devalue the $14 trillion in U.S. debt that is currently held around the world, causing a selloff of government assets. The result might be a worldwide financial crisis, given the fundamental importance that these secure assets play in the financial system.
Rapid inflation, on the other hand, could signal a looming fiscal disaster. The federal government may be forced to print fresh money to pay down its debt if borrowing costs are too high or demand for US debt is too low. While countries can typically engage in minor monetary expansion or seigniorage without disrupting the economy, constantly growing the money supply to chase ever-rising deficits is a prescription for hyperinflation. This inflation could be sparked by the deployment of new heterodox economic methods designed to assist this printing.
In order to prevent one of the aforementioned possibilities, a government with a large amount of debt may be forced to implement austerity measures during a recession. As a result of this fiscal restraint, the economy could be held back for a lengthy period of time, potentially leading to a crisis.
Even though mounting debt raises the risk of a fiscal crisis, no one can say with certainty when one will occur. One potential is a shift in foreign creditors’ attitudes, who may decide to drastically alter their loan holdings for economic or geopolitical reasons. In the past, many budgetary crises have been exacerbated by a recession or financial crisis, as has been the case here. Also, a fiscal crisis might be precipitated if markets fear that the US fiscal policy and the country’s institutions would be compromised due to the adoption of new fringe economic theories that give elected politicians control over monetary policy.
It’s a good thing that the danger of a US fiscal catastrophe is low at the moment. That said, there’s no way of knowing if things will stay that way. An impending financial catastrophe is more likely to emerge if debt levels and growth rates continue to escalate.
Conclusion
The U.S. government has accumulated a large amount of debt. However, even if the country’s budgetary status may seem abstract, the negative repercussions if we continue on our current path are real.
Debt increases federal interest payments, raises interest rates, and weakens our ability to respond to a future recession or catastrophe. It also increases the burden on younger and future generations. This article discusses some of these repercussions.
Some of the arguments against the importance of debt have been addressed in an accompanying Debt Question & Answer piece that we have included in this study.
Increasing debt has a number of negative repercussions that we will explore in future articles, including the erosion of democratic institutions, the erosion of the country’s geopolitical status, and even the destruction of rational policymaking. Our debt is the greatest threat to our national security, according to Admiral Mullen, former Joint Chiefs of Staff Chairman.
In order to avoid putting our nation’s and economy’s security at danger and increasing the negative repercussions of borrowing, officials should pay for new ideas and work together to improve our fiscal condition. In the absence of a solution, the long-term implications of debt may be impossible to reverse.
What happens if a country Cannot pay its debt?
U.S. federal government is rated AAA by most credit rating agencies. The country’s credit rating would be automatically lowered if it defaulted on the debt, resulting in higher interest rates for all Americans. Increasing interest rates on small company loans will make them more expensive. Loans from the Small Business Administration (SBA), which are often less expensive and easier to obtain, but nevertheless reflect market conditions, will rise in cost.
How can the US pay off its debt?
U.S. debt repayments are limited by a constraint on how much money the country can borrow. Budgets approved by Congress each year detail how much money would be allocated to various government initiatives, such as building new roads and bridges and providing retirement benefits like Social Security. All of that expenditure must be funded by taxes levied by Congress as well.
What happens when a country has too much debt?
As part of the study on vulnerability indicators, economists are determining how much debt an economy can handle and how much is too much. By financing productive investment, borrowing from abroad can help countries grow quicker and lessen the impact of economic downturns. However, a debt crisis with potentially huge economic and social costs can emerge if a country or government accumulates debt beyond what it can service. Because of this, it is critical to determine how much debt an economy or government can safely bear. An analysis like this is especially pertinent to developing market economies, which rely significantly on global capital markets to fund their massive financing demands.
Defining debt sustainability can be a difficult task. An example of this is when a borrower is expected to continue making payments on its loans without making an excessively big future adjustment to its balance of income and expenditure. This means that a person’s ability to repay their debt becomes unsustainable if they are unable to pay off their debts quickly enough. It is necessary to make estimates regarding future interest rates, currency exchange rates, and income changes in order to determine what level of debt is sustainable. It’s difficult to get this right, like any judgment that requires assumptions about the future.
- establishing a long-term picture of how the economy’s (or the government’s) ability to pay its debts will change over time;
- ascertaining if the results could result in an unsustainable condition, as indicated above.
Predicting revenue and spending flows, including debt service, is the initial phase, followed by other important macroeconomic factors, such as the interest rate, growth rate, and changes in the exchange rate (given the currency denomination of the debt). Debt dynamics can be forecasted only to the extent that government policies influence these variables and macroeconomic and financial market events, both of which have inherent uncertainty.
In light of the numerous unknowns, it’s critical to look into the potential dangers as well. Higher finance costs are a major factor, and they may be a reflection of broader trends on the financial marketsincluding probable spillover effects from other nations that are strugglingor funding issues unique to the country in question. Also, after the collapse of an exchange rate peg, a sudden depreciation of a country’s currency can significantly raise the burden of foreign currency-denominated debt. This is true, for example in Indonesia in 1997-98, when a crisis erupted and the amount of capital outflows resulted in currency rate revisions considerably above any original forecasts of overvaluation.
Contingency claims, such as those linked with explicit or implicit assurances of debt or bank deposits, are another key source of uncertainty around predictions of debt and debt service In normal times, many contingent claims go ignored, but in times of crisis, they are more likely to be used. In recent developing market crises, where defaults in one sector have spilled over into another, such claims have been a crucial component. In fact, it is difficult to measure contingent claims, both because the sums subject to such claims are unknown and because the terms of the claimsthe precise circumstances in which they would become actual liabilitiesare often unclear.
In a debt sustainability assessment, determining a point at which debt becomes unmanageable is the most challenging stage. In other cases, such requirements have been set for specific groups of countries. According to empirical evidence, debt restructurings occurred more frequently in countries with net present values of debt in excess of $200 per cent of export revenues. There is some evidence that a debt-to-GDP ratio of 40% marks a tipping point for debt exposure issues in other non-industrial countries. Although this is characteristic of the countries analyzed, it also reflects the low amount of foreign assets in the countries studied. In general, a debt threshold should be applied to particular countries with caution. For a country’s debt to become unsustainable, there is no one threshold that can be reliably defined. This is because country-specific characteristics and circumstances play a crucial impact beyond the debt ratio. If a country has a higher debt-to-GDP ratio and a larger share of exports to GDP, it is less worrying to have a higher ratio of domestic currency debt.
In the end, evaluations of sustainability are probabilistic: it is possible to imagine a future in which a country’s debt is sustainable and one in which it is not. When determining if a country’s debt levels are too high, a certain amount of discretion is required.
- medium-term balance of payments and fiscal developments forecasts are an IMF mainstay, especially as part of an IMF credit package.
- the medium-term assessments of the sustainability of the current account and the real exchange rate, which have an impact on the sustainability of the public and the external debt, especially when there is a significant amount of debt in foreign currency; and
- A recent addition to the IMF’s toolbox is a financial sector stability assessment that helps identify the financial sector’s sensitivity to certain shocks, which might have substantial implications for the government’s contingent obligations.
The International Monetary Fund (IMF) has recently created a standardized approach for analyzing debt sustainability based on these characteristics. The IMF’s baseline medium-term predictions for a country’s economy are at the heart of the framework’s examination of fiscal and external debt sustainability. The framework comprises a typical set of sensitivity tests that generate the debt dynamics under different assumptions about important variables beyond the baseline forecasts for public and external debt (including economic growth, interest rates, and the exchange rate). For each country, these alternative assumptions have been calibrated using historical averages and volatility of these variables.
There are three possible uses for the framework. Using the approach can help countries with somewhat high indebtedness, but no impending crisis, identify vulnerabilitiesthat is, the country’s potential for “insolvency territory.” Using this approach, countries who are on the verge of or in the midst of a crisis can analyze the feasibility of the debt-stabilizing dynamics outlined in the program forecasts for countries that have high borrowing costs or limited market access. Finally, the framework may be used to investigate the debt dynamics following a possible restructure in the wake of a default.
Would the new approach have helped expose weaknesses in 1999 in Turkey, for example? It’s safe to say that yeah. Even if the estimates at the time did not appear too optimistic, the framework would have raised warnings regarding Turkey’s external debt situation in the case of adverse shocks.
IMF economists conducted sensitivity analyses on Turkey’s external vulnerability at the time of the 1999 IMF agreement approval to see if the framework would have been effective. However, it was expected that external debt would rise by 10% of GNP under the IMF-supported program. This would be offset by increased central bank reserves, so net external debt would remain about the same (in fact, to decline by about 2 percent of GNP between 1998 and 2001). As a result, the debt to GNP ratio increased by over 30 percent. How did the IMF’s employees fall so far short of the goal? For the period 1999-2000, the country’s trade deficit was around 6% more than expected. Underestimation of imports’ ability to respond to rising incomes was one factor, but oil prices were also a factor. The unexpected demise of Turkey’s peg to the Turkish lira in early 2001 also contributed to a significant increase in debt.
What could the framework have foreseen? For crucial parameters, it would have predicted that net debt would rise by 6 percent of GNP, rather than the forecast 2 percent of GNP decrease. Additional information may have been gained by doing sensitivity testing. Since the devaluation, there has been a 7% increase in the debt-to-GDP ratio, which is within the two-standard deviation shocks (which represent the majority risk to this scenario) for either interest rates, real GDP growth or noninterest current account deficits. There was a rise in the net debt ratio of more than 30% in either the two-standard deviation shock to the US dollar deflator growth rate or the typical 30-percent devaluation shock, according to both devaluation scenarios.
A wide range of nations will gradually be included to the framework’s use for monitoring and informing IMF program funding choices, with appropriate revisions based on initial experience. Even if the goal is to give better uniformity and discipline for sustainability assessments, the framework is not intended to be used in a completely mechanical and rigorous manner: depending on national circumstances, there may be solid reasons to deviate to some extent from it Basic sustainability studies and calibrated sensitivity testing should be applied to all countries, regardless of their location. Additional considerations, such as the debt structure (in terms of its maturity composition, whether it is fixed or floating rates, whether it is indexed, and by whom is held) and various other indicators of vulnerability must be taken into account when interpreting the results generated by the framework. Putting these numbers into perspective will be easier with information from the markets, such as expectations of interest rates and spreads reflected in yield curve positions and shapes, as well as new borrowing opportunities and whether or not those opportunities have been interrupted or long-term debt issued with difficulty.
The IMF’s Policy Development and Review Department prepared a document titled “Assessing Sustainability” on May 28, 2002.
Emerging Financial Markets, David O. Beim and Charles W. Calomiris, 2001 (Boston: McGraw-Hill).
IMF Working Paper 01/2, “Crises and Liquidity: Evidence and Interpretation,” Enrica Detragiache and Antonio Spilimbergo, 2001 (Washington).
An empirical examination of currency crashes in emerging markets was conducted by Jeffrey Frankel and Andrew Rose in 1996 in the Journal of International Economics.
Emerging Markets: An Early Warning System for Financial Vulnerability by Morris Goldstein, Graciela Kaminsky and Carmen Reinhart, 2000 (Washington: Institute for International Economics).
the leading indicators of currency crises,” IMF Staff Papers Vol. 45 (March), pp. 1 to 48, Graciela Kaminsky, A Lizondo and Carmen Reinhart, 1998.
Reprinted in American Economic Review, Vol. 89 (June), pp. 473-501. Graciela Kaminsky and Carmen Reinhart, 1999, “The Twin Crises: The Causes of Banking and Balance-of-Payments Problems”
It’s been a decade since Carmen Reinhart’s 2002 NBER Working Paper No. 8738, “Default, Currency Crises, and Sovereign Credit Ratings,” appeared (Cambridge, Massachusetts: National Bureau for Economic Research).
‘The Sustainability of International Debt,” by John Underwood, 1990 (unpublished; Washington: World Bank, International Finance Division).
