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Questions tagged [debt]

An obligation to pay another party at some point in the future. Examples include national debt, corporate bonds, and household credit.

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Why do bonds pay back the entire principal at maturity instead of paying it off gradually?

Bonds usually pay interest only and the entire principal is paid back at maturity. On the other hand fixed rate retail loans pay back both interest and principal such that at the end no debt is ...
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falling household savings

While reading Mazzucato's "The value of everything", I come across this The rise in private debt in the US and UK has resulted in household savings falling as a percentage of disposable income - ...
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Who owns state bonds?

Let's take as an example the province of Quebec in Canada with a debt of $273B. It just elected a conservative and nationalistic government to lead the next 4 years. Their platform is that of fiscal ...
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Syndicated Loans Terminology - Borrower & Sponsor

I am trying to understand what is the difference between the Borrower and the Sponsor entities in a syndicate loan agreement. Namely, it looks like quite often, the Borrower entity will be a Company ...
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How can countries be in so much debt?

You regularly hear in the media how countries are billions or even trillions of US dollars in debt. How does a country get so far in debt, and who is it in debt to? How can countries of the world ...
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When Does a Country's External Debt Become a Problem?

Here in the UK, the external debt is currently over 300% of GDP. To me this looks very worrying, using my basic financial logic, it seems like this debt will only go up (because of interest combined ...
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Explain some All countries excluding residents in BIS Debt Securities Data

In the BIS Debt Securities statistics: In both column "issueresidence" and column "issuenationality" there is a category called "All countries excluding residents". I do not understand what it means. ...
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US holdings of foreign securities is measured in Gross value or Outstanding?

In the annual reports of US Treasury on US holdings of foreign securities, the amount of holding is usually named as "total holdings...as of {date/year}". Is it the amount of only the year of report, ...
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Printing Money vs. Issuing International Bonds

I'm reading Niall Ferguson's The Ascent of Money and I had a question about the economic difference between printing money vs. selling bonds to foreign entities. At one point in the book, the author ...
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Is Debt Monetization Equivalent to transferring money from rich to poor?

I'm reading Ray Dalio's "How the Economic Machine Works", and he says that there are four factors contributing to deleveragings in economies: 1) Debt Reduction 2) Austerity 3) Transferring wealth ...
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How do I calculate bad debt on revolving credit?

I'm not sure if this is the correct Stack Exchange site for this question but I think it makes the most sense to ask it here. I have a revolving credit system. A customer purchases and then has 6 ...
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With adoption of CNH, will China stop buying US Treasury securities?

From what I've been reading, China's been using much of the USD it gets from selling exports, to buy US bonds. With China recently loosening its grip on the renminbi in order to make it an ...
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Relation between growth rate of GDP and real interest rate for sustainable debt-to-GDP ratio

Why is the relation between the growth rate of GDP and the real interest rate important for sustaining the government the debt-to-GDP ratio ?
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Why, in such a debt-heavy era, is inflation still such a Bad Thing(TM)?

Going through the Wikipedia article on inflation, a number of pros and cons to inflation are covered. Most of the "cons" of inflation (cost-push inflation, hoarding, hyperinflation, diminished ...
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What is consumer debt and how could it make businesses vulnerable?

Consumer debt is the obligation to pay for the credit that the customers have used. But, how can tapping out more credits make business more vulnerable?
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Debt Securities datasources inconsistence

From BIS Debt Securities Statistics I found out the International Debt Securities for all countries. I'm collecting data for the US, so I merely took the relevant lines of data for the US. From IMF ...
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Can a currency crisis be the proximate cause of a debt crisis?

I'm just curious whether there are any historical examples of a currency crisis in a country (speculative attacks leading causing a sudden devaluation of currency) leading directly to a debt crisis?
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Debt bearing capacity

In times of low yields and the prospect of rising yields, I asked myself if the european countries can ceteris-paribus cope with rising yields. Is there a way to calculate the effect of rising yields (...
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Why shouldn't governments use Forex reserve to pay their debts?

India has around 470 billion USD in debt and has around 400 billion USD in forex reserves. So why should India or any other nations shouldn't use their forex reserves to pay off their external debt ?
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What is the credit to gdp ratio?

I was reading a publication (Uruguay, Selected Issues, IMF Report), and it was mentioning the credit to GDP ratio, however when I looked it up all I found was the credit - GDP ratio gap, however I don'...
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Public Debt as Percent of GDP

My question relates to calculation total debt as percent of GDP (quarterly). Since debt is a stock and GDP is a flow, I can understand calculation it on an annual basis but not quarterly.
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Public debt and GDP in post-socialistic countries

Why is public debt in % of GDP in post-socialistic countries of Eastern Europe is less than in countries of Western Europe. Some arguments, opinions or articles?
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Do institutions buy debt with credit?

I am reading Money Power book, from 1932 (http://www.worldcat.org/title/money-power-and-human-life/oclc/3783026). The author explains how the War Loans in the UK worked. He says that the government ...
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«public-sector debt must now also include the central bank’s sharply rising debts». It didn't before?

In this text by Carmen Reinhardt, there's the following sentence: For Greece, Italy, Portugal, and Spain, public-sector debt must now also include the central bank’s sharply rising debts. What ...
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How have central banks been injecting currency after crises since 2007?

In an article by Jean-Michel Naulot about the 2007–2008 financial crisis, I read (my translation): Although central banks had an exemplary reaction at the time of the [2007–2008] crisis, they ...
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Does debt include interest owed? [closed]

If I calculate debt to gdp ratios, do I include the interest payment on the debt as part of the debt? Is debt defined as a recursive sequence? Does current debt= interest on debt + previous debt?
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Is there a statistic that shows which countries would be owed money if all external public debts were payed immediately?

The media loves to tout big debt figures whenever there is an economic crisis, but unless we know who owes money to who, it seems to me that these figures are useless since debt is all relative. I ...
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What does DOD stand for in this indicator?

I was looking at the indicator External debt stocks, total (DOD, current US$) on the worldbank website and I don't understand what DOD stands for.
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Purchase of the public debts by the ECB

In France, one of the presidential candidate said that the European Central Bank should purchase the public debts of the country and transform it into a perpetual debt (this is a literal translation, ...
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Limitation on what can be borrowed

Is there a framework for determining the limit of what can be borrowed? For example, lets say an institution with 1 trillion USD wanted to hold 5 trillion USD in government bonds, would there be a ...
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Economic effects of very large (>200%) household-debt-to-GDP-ratio in advanced economies

According to OECD figures, five OECD countries have houshold-debt-to-GDP ratios in excess of 200%: Denmark 292.0% Netherlands 277.1% Norway 221.8% Australia 211.8% Switzerland 211.2% Most of ...
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Is the American economy on the same path when it had a massive crash in 2007? Is there another bubble coming

I guess I should not be asking for technical answers, because I've learned economists are not to predict things like this. Yet from current data, and this article that reviewed said data: http://www....
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Proxy for debt service?

I'm trying to get info on debt service relative to GDP for Morocco. I know these sorts of figures exist for the US, Japan, etc., since a few authors use them, but Trading Economics does not seem to ...
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What would happen if China called in its debt?

I was talking with a friend of mine the other day about Trump putting the 35% tax on all overseas manufacturing. Couldn't this hurt those countries that have plants where US manufacturing comes from? ...
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Is it true that the eight richest men have more wealth than the bottom 50% of world population?

This statistic from Oxfam, an anti-poverty consortium, has been reported in prominent media outlets (example). Other articles dispute this statistic as misleading due to flimsy assumptions about debt (...
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Deficit: can be seen as a return?

Suppose I have a series of debt as % of GDP. By computing returns on this serie e.g. debt as % of GDP in year 1 is 50% in year 2 is 60% I compute $(60\%-50\%)/50\%$ can I interpret this measure as ...
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Is there a reliable estimate of what proportion of adults in a country are in debt at a given time?

Is there a reliable estimate of what proportion of adults in a given country are in debt at a given time? With "debt" covering student debt, debt secured by mortgages on property, credit card debt, ...
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Could a hike in interest rates cause a country to be unable to pay back it's debt burden?

Sometimes I read in news articles, that a central bank can't hike the interest rates much higher, because then the government would be unable to pay the interest rate burden of it's government debt. ...
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What determines the rate of interest on national debt for a country?

From what I understand of Canada's rate of interest on the debt, after Pierre Trudeau, it was around 17.4%, after Mulroney, it was around 7%, and after Harper it was around 5.2%. Finding these ...
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Why can't we forgive USA's debt? [closed]

According to this article USA owns $19 trillion-plus dollars. So it seems USA owns $12 trillion to its own people. Why can't we just forgive it and remove this debt? People will not get this money ...
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Is the shareholder-creditor conflict the same as debt-equity conflict?

I am having some problems understanding the difference between shareholder-creditor conflict and debt-equity conflict. I understand what the shareholder-creditor conflict is about, but when I try to ...
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What's the difference between public debt, government debt and national debt?

When it comes to non-private debt, I hear these three terms the most, but I am not sure if they're interchangeable or discernible. Also, are they recorded in the balance of payments? I'm guessing if ...
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If banks create money by lending it out, how are they taking any risk?

When I lend money to someone and they don't pay it back, I lose my money. I can only lend out money that I own (or borrow). I understand that when a bank lends money, that money is created the ...
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What does it mean to say that deficits are financed by debt issue?

Let $B_t$ be real net government debt, let $G_t$ be public spending, let $T$ be net tax revenue (i.e, tax income minus transfers), and ignore everything else. One can show, $$B_{t+1} = (1+r)B_t + G - ...
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Converting per capita growth rates for subgroups into contribution to total per capita growth rate

You are given total debt for the second quarter of 2003 and the second quarter of 2004 for the overall population and four age groups. The four age groups collectively account for the entire ...
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Why not just print money to combat deflation?

If interest rates are zero and inflation is under 2% per year then why not have the fed print money without borrowing until inflation is back at 2% per year? The money could be used to pay off the ...
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What happens to a country with lot of debt?

What happens to a country with lot of debt? As far as I know, debt is a way to get hands on extra money which will put burden on the future governments. What if every successive government keeps ...
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What's the difference between public debt, national debt and government debt? [duplicate]

When it comes to non-private debt, I hear these three terms the most, but I am not sure if they're interchangeable or discernible. Also, are they recorded in the balance of payments? I'm guessing if ...
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1answer
51 views

Can fiscal consolidation be expansionary?

In reading this article of Paul Krugman, we immediately see that in his opinion the literature that defended the possibility of the fiscal multiplier being negative for some high-debt countries, i.e. ...
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Macroeconomics and equilibrium

Preliminary note: I have nearly zero economical background, I am a physicist and my question is probably very naive, but I would like a clear and simple explanation. If I am not wrong, the global ...