Default in Today's Advanced Economies: Unnecessary, Undesirable, and Unlikely

Business & Finance, Economics, Money & Monetary Policy, Macroeconomics
Cover of the book Default in Today's Advanced Economies: Unnecessary, Undesirable, and Unlikely by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk, INTERNATIONAL MONETARY FUND
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk ISBN: 9781455270842
Publisher: INTERNATIONAL MONETARY FUND Publication: September 1, 2010
Imprint: INTERNATIONAL MONETARY FUND Language: English
Author: Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
ISBN: 9781455270842
Publisher: INTERNATIONAL MONETARY FUND
Publication: September 1, 2010
Imprint: INTERNATIONAL MONETARY FUND
Language: English
This note summarizes the main arguments put forward by some market commentators who argue that default is inevitable, and presents a rebuttal for each argument in turn. Their main arguments focus on the size of the adjustment and continued market concerns reflected in government bond spreads. The essence of our reasoning is that the challenge stems mainly from the advanced economies’ large primary deficits. Thus, by lowering the interest bill while triggering the need to move to primary balance or a small primary surplus, default would not significantly reduce the need for major fiscal adjustment. In contrast, the emerging economies that defaulted in recent decades did so primarily as a result of high debt servicing costs, often in the context of major external shocks. We conclude that default would be ineffective and undesirable in today’s advanced economies.
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
This note summarizes the main arguments put forward by some market commentators who argue that default is inevitable, and presents a rebuttal for each argument in turn. Their main arguments focus on the size of the adjustment and continued market concerns reflected in government bond spreads. The essence of our reasoning is that the challenge stems mainly from the advanced economies’ large primary deficits. Thus, by lowering the interest bill while triggering the need to move to primary balance or a small primary surplus, default would not significantly reduce the need for major fiscal adjustment. In contrast, the emerging economies that defaulted in recent decades did so primarily as a result of high debt servicing costs, often in the context of major external shocks. We conclude that default would be ineffective and undesirable in today’s advanced economies.

More books from INTERNATIONAL MONETARY FUND

Cover of the book Privatization and Public Enterprises by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Regional Economic Outlook, April 2016, Sub-Saharan Africa by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Finance & Development, September 1968 by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Beyond Adjustment: The Asian Experience by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book The Economy of the Middle East and North Africa in 1997 by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Pension Regimes and Saving by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Bank Size and Systemic Risk by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Policies for Macrofinancial Stability: Options to Deal with Real Estate Booms by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Finance & Development, March 1996 by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Inflation Targeting - What is the Meaning of the Bottom of the Band? by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Expenditure Composition and Economic Development in Benin by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Inflation and Growth in China by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book A New Tool for Distributional Incidence Analysis by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Trade Policy Developments in Industrial Countries by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
Cover of the book Rules-Based Fiscal Policy in France, Germany, Italy and Spain by Carlo Mr. Cottarelli, Paolo Mr. Mauro, Lorenzo Forni, Jan Gottschalk
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy