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Benefits and Costs of Debt: The Dose Makes the Poison

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dc.contributor.authorKose, M. Ayhan
dc.contributor.authorOhnsorge, Franziska
dc.contributor.authorSugawara, Naotaka
dc.date.accessioned2020-03-04T16:54:28Z
dc.date.available2020-03-04T16:54:28Z
dc.date.issued2020-02
dc.description.abstractGovernment debt has risen substantially in emerging market and developing economies (EMDEs) since the global financial crisis. The current environment of low global interest rates and weak growth may appear to mitigate concerns about elevated debt levels. Considering currently subdued investment, additional government borrowing might also appear to be an attractive option for financing growth-enhancing initiatives such as investment in human and physical capital. However, history suggests caution. Despite low interest rates, debt was on a rising trajectory in half of EMDEs in 2018. In addition, the cost of rolling over debt can increase sharply during periods of financial stress and result in financial crises; elevated debt levels can limit the ability of governments to provide fiscal stimulus during downturns; and high debt can weigh on investment and long-term growth. Hence, EMDEs need to strike a careful balance between taking advantage of low interest rates and avoiding the potentially adverse consequences of excessive debt accumulation.en
dc.identifierhttp://documents.worldbank.org/curated/en/648141582830563001/Benefits-and-Costs-of-Debt-The-Dose-Makes-the-Poison
dc.identifier.doi10.1596/1813-9450-9166
dc.identifier.urihttps://hdl.handle.net/10986/33409
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 9166
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectDEBT SUSTAINABILITY
dc.subjectFISCAL POLICY
dc.subjectFISCAL TRENDS
dc.subjectFISCAL BALANCE
dc.subjectGOVERNMENT DEBT
dc.subjectPRIVATE DEBT
dc.subjectFISCAL POSITION
dc.subjectEMERGING MARKET ECONOMIES
dc.titleBenefits and Costs of Debten
dc.title.subtitleThe Dose Makes the Poisonen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleBenefits and Costs of Debt: The Dose Makes the Poison
okr.date.disclosure2020-02-27
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/648141582830563001/Benefits-and-Costs-of-Debt-The-Dose-Makes-the-Poison
okr.guid648141582830563001
okr.identifier.doi10.1596/1813-9450-9166
okr.identifier.externaldocumentum090224b08767a819_1_0
okr.identifier.internaldocumentum31822564
okr.identifier.reportWPS9166
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/648141582830563001/pdf/Benefits-and-Costs-of-Debt-The-Dose-Makes-the-Poison.pdfen
okr.statistics.combined12700
okr.statistics.dr648141582830563001
okr.statistics.drstats11742
okr.topicFinance and Financial Sector Development::Capital Markets and Capital Flows
okr.topicInternational Economics and Trade::External Debt
okr.topicMacroeconomics and Economic Growth::Economic Adjustment and Lending
okr.topicMacroeconomics and Economic Growth::Economic Policy, Institutions and Governance
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.unitDevelopment Prospects Group, Development Economics
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relation.isAuthorOfPublication.latestForDiscovery5807995a-9e0a-5d56-b622-d4d19e723613
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
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