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The Dynamic Relationship Between Global Debt And Output The global economy has reached record levels of indebtedness, to the concern of researchers and policymakers. On the one hand, debt can be beneficial by smoothing out consumption and accelerating capital accumulation, and thus contributing to economic output. On the other hand, rising debt increases debt service costs and can potentially expose countries to financial risks and lower output. In particular, a large expansion of debt can be associated with a significant economic contraction that can last for years. Global debt as a share of gross domestic product (GDP) has been on an upward trend for decades (see figure 1). Rising debt levels are occurring across developed and developing countries in both the public and private sectors. Despite the overall global trends, patterns of debt vary by sector and a country’s level of economic development.[1] For example, in the private sector - comprising firms and households ....
News 1.4.11 The TIAA-CREF Institute has presented its 2010 Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security to Cabot professor of public policy and professor of economics Kenneth S. Rogoff and Carmen M. Reinhart, Weatherstone Senior Fellow at the Peterson Institute for International Economics, coauthors of the best-selling book . The award honors the late Nobel Prize laureate Paul A. Samuelson, Ph.D. ’41, LL.D. ’72, for his achievements in the field of economics and his service as a CREF trustee from 1974 to 1985. The Samuelson Award is given annually in recognition of an outstanding research publication containing ideas that the public and private sectors can use to maintain and improve America’s lifelong financial well-being. A $10,000 prize will be shared by the winners. ....
As the COVID-related, worldwide death toll has exceeded two million and economies are suffering ever more extended lockdowns, unimaginable amounts of money have been injected into households and enterprises to prevent a 1920s-style collapse. According to 2020 IMF statistics more than $12 trillion have been spent by governments worldwide already and much more money is on its way. As a result, public coffers were never more depleted. Data published by the IMF and the UN in September last year and then again in October showed national debt for some countries increasing as much as 25 per cent – in one month. Countries are calmly adding to their stock of arrears, which in the case of Greece (206%) has doubled from levels once considered untenable, demanding a bailout. The sudden insolvency of countries like Portugal, Spain and Ireland in 2010 was caused by investors scared by the level of debt. This triggered a crisis which almost toppled the euro. ....
Vice President and World Bank Group Chief Economist Carmen M. Reinhart is the Vice President and Chief Economist of the World Bank Group. Assuming this role on June 15, 2020, Reinhart provides thought leadership for the institution at an unprecedented time of crisis. She also manages the Bank’s Development Economics Department. Reinhart’s areas of expertise are in international finance, and macroeconomics. Her work has helped to inform the understanding of financial crises in both advanced economies and emerging markets. She has published extensively on capital flows, exchange rate policy, banking and sovereign debt crises, and contagion. She comes to this position on public service leave from Harvard Kennedy School where she is the Minos A. Zombanakis Professor of the International Financial System. Previously, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics and Professor of Economics and Director of the Cente ....