Questions tagged [debt]

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

23 questions with no upvoted or accepted answers
Filter by
Sorted by
Tagged with
4
votes
1answer
115 views

Why don't governments exploit negative interest rates more than they currently do?

At the moment many governments, such as Finland's, are able to borrow money at negative interest rates. My question is: why don't they borrow as much money as possible while interest rates are ...
3
votes
0answers
45 views

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 ...
2
votes
0answers
21 views

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, ...
1
vote
0answers
18 views

Is a high borrowing rate bad?

I'm not an economist, so this may be a stupid question, but why are high borrowing rates among individuals and corporations bad? Like, I've heard high student and credit card debt mentioned as reasons ...
1
vote
0answers
14 views

Useful models/theory private debt and borrowed constrained households

In macro oriented research papers the role of private debt is discussed and that apparently when there is a lot of private debt in the economy, households tend to be borrowed constrained.. Could ...
1
vote
1answer
69 views

Contribution by each factor

Must admit it has been many years since I have done advanced calculations or anything remotely like it, so please bear with me. I have problem that I hope to get some help with. Say I have below ...
1
vote
0answers
24 views

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 ?
1
vote
0answers
21 views

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?
1
vote
0answers
13 views

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 ...
1
vote
0answers
38 views

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....
1
vote
0answers
14 views

What is the FRB's Z.1 table L.218

I'm updating a document that cites this: As of December 2011, 67 percent of home mortgage debt was either securitized through agency or non-agency MBS or held on the balance sheets of Fannie ...
1
vote
0answers
104 views

Why might a country with a budget surplus continue issuing bonds - ie borrowing?

Some argue that if a government runs a budgetary deficit, it is a drag on the public finances because taxpayers must fund interest payments to external creditors. If the interest payments were an ...
0
votes
0answers
15 views

Spending despite fiscal deficit

This is going to be a rather simple question. Surprisingly, I did not find quite a lot of answers satisfactorily explaining my point. The question goes like this- The USA, under the Trump regime, ...
0
votes
0answers
29 views

Why don't we have many-to-many lending yet?

Trying to research this for some time, but can't really find anything relevant. As it currently stands borrowing can be one-to-one: 1 customer borrows money from 1 bank. And can be one-to-many: 1 ...
0
votes
0answers
34 views

How to calculate indentical cash flows?

So i have this question: Homemade leverage Companies A and B differ only in their capital structure. A is financed 30% debt and 70% equity; B is financed 10% debt and 90% equity. The debt of both ...
0
votes
0answers
173 views

What is the opposite of debt?

In trade, the opposite of trade deficit is trade surplus. In other words, the negative deficit is called surplus. And then, what is the term for negative debt? Say for example Bank A owes 5 million ...
0
votes
0answers
10 views

Calculating the weighted average cost of capital

Question : Provided that interest on debt is 12%, dividend to share holders are 15%. Calculate the weighted average cost of capital if debt is 70% and equity is 30%. Given, tax rate is 20%. I know, ...
0
votes
1answer
99 views

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 ...
0
votes
0answers
44 views

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 (...
0
votes
0answers
58 views

Project Financing Evaluation and accounting

While evaluating the whole entrerprise value of Falck Renewables using the discounted cash flow method I end up with a negative continuing value and economic profit due to the negative spread between ...
0
votes
1answer
13 views

Does Medicaid or Medicare represent a higher risk to the Federal Government Solvency and Debt going forward?

I'm trying to understand not only which program is expected to be larger in terms of costs, but which one has the least capacity to adjust (reduce benefits if revenues for the program fall).
-1
votes
1answer
92 views

Currency Devaluation - As a Means of Paying Off Debt

From https://www.sapling.com/8117368/debt-handled-currency-devaluation: Currency devaluation will not only affect consumer debts, but it will affect how a country pays back its national debt. If a ...
-1
votes
2answers
57 views

Why does a weaker currency make sovereign debt cheaper?

Investopedia tells me that a weaker currency will reduce sovereign debt burdens. It is quoted as saying 'a weaker currency makes [these] payments effectively less expensive over time.' However, I ...