By Sean Hagan, Maurice Obstfeld, and Poul M. Thomsen
Versions in Français (French), Deutsch (German), ελληνικά (Greek), and Español (Spanish)
Debt is central to the functioning of a modern economy. Firms can use it to finance investments in future productivity. Households can use it to finance lumpy purchases, such as big consumer durables, or a home. Sometimes, however, firms’ investments do not pan out or a household’s main earner loses his or her job. Countries’ legal systems generally recognize that in these cases, debtors and creditors alike—along with society at large—may be better off if there is an orderly procedure for reorganizing debts. Continue reading
Filed under: Debt Relief, Government, Greece, IMF, interest rates, Investment, Reform, structural reforms | Tagged: debt relief, debt restructuring, debt sustainability, debt-to-GDP framework, government debt, Greece, iMFdirect blog, investment, Maurice Obstfeld, Paris agreement, Poul M. Thomsen, Sean Hagan, sovereign debt, structural reform | Leave a comment »
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