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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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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380 views

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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54 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 ...
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499 views

What would happen if tomorrow all private and public debt was erased? [closed]

The question is what would happen if tomorrow all private and public (government) debt was erased? I am especially curious if normal daily economic activities would go on, what would the role of ...
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Credit market debt is $200 trillion?

In a recent article by David Stockman he wrote: Credit market debt outstanding has soared from \$85 trillion to \$200 trillion. What is he talking about? What is the itemization of this debt. ...
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The appeal of low-dividend stocks when trading with government debt

Background: In the 1710s, the British government borrowed heavily to finance wars. To reduce the interest on this debt, the government converted this debt into stock from a private company. The ...
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Differences between international and national creditors

When considering a nations debt, how does it affect the nation whether its debt is held by national or international creditors? If there is preference does this translate into different prices for the ...
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What Level of Government Debt to GDP Ratio is Sustainable?

I was reading that Japan has a debt to gdp ratio of 240pc and I cannot understand why this has not left the country "bankrupt"? From looking at this like an ordinary person this level would be ...
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What analysis has been done to predict the next big financial crash?

There has been a lot of talk about a big pending financial crash due to the slowing global economy, low interest rates, rising debt levels, etc. Now I'm wondering: Has anyone done any analysis to ...
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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 ...
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Is the loan principal ever delivered in pieces over time?

Not sure if this is the right place for this question but it's more of a theoretical finance question than a personal finance question. So a loan has a principal amount that is given to the borrower ...
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How much leverage has the Federal Reserve taken on today (Jan 2016)?

http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di What makes you most nervous about the future? Debt. The idea that growth will ...
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Will major economies be able to repay their debt?

According to The Economist, lots of major economies are in debt to the extent of it consuming most of the countries' GDP. And the whole system almost seems to resemble a Ponzi scheme at a macro level. ...
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What is the need for a special purpose entity/vehicle in mortgage backed securities

What is the need to create a special purpose entity/vehicle (SPV) for mortgage backed securities? What potential risks are avoided due to the creation of SPV? It is my naive idea that the holder of ...
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Why aren't perpetual bonds more common?

Most government bonds and corporate bonds have a maturity date when the principal must be repaid. While the few percents of interest every year is generally not a big problem to pay out, when a bond ...
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Has the world become poorer?

This question is not backed by serious economic research but mainly by a very simple attempt to look at how the world economy has changed. I am asking whether and why the world has, over the past 50 ...
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107 views

Economic theory / papers on sovereign debt?

I am an undergraduate student who does some research on sovereign debt and its sustainability. Which papers are essential to understand how sovereign debt works and which implication it has for the ...
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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 ...
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1answer
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Why monthly present in on line monthly payment calculator calculates as annual percent divided by 12?

Why monthly present in on line monthly payment calculator calculated as annual percent divided by 12? I think it's wrong, it should be exponential. For instance annual percent 4%. To calculate monthly ...
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Who owns German debt?

I know that Germany has huge external debt. I don't know how to find out which entities own this and especially which country they belong to.
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What will happen to bank loans in the event of hyper inflation?

Say for example a person gets a home loan of $100,000 in a certain country at an interest rate of 10%. Inflation is normally around 5% in this country. What could happen to that person's loan if the ...
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How much of the Greece's public debt is created by its trade deficit?

How much of the Greece trade deficit reflects into it's public debt? Each year, Greece is importing about two times as much as it's exporting. In some years, even three times more. How much of that is ...
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Why do lenders dislike early loan repayments?

I've frequently seen references in blogs and articles about how banks and other lending agencies like to refer to people who repay loans on an accelerated schedule as "deadbeats", because they get ...
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Could debt cause inflation instead of deflation?

It is well known that debt can cause deflation, especially during crisis: to repay their debts agents sell their goods which causes a fall in prices. But if there is no crisis and agents "have the ...
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Australia and Saudi Arabia - Structural Similarities

I refer specifically to this article in which Andrew Critchlow paints a pretty dire view of the Australian economy. The line which challenged my priors was: ...
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Have the Greek bailouts been included in state budgets Eurozone members?

A lot of people (mainly journalists and politicians) say that Eurozone taxpayers pay for the Greek bailouts. On the other hand, a lot of economists say that those money have not been added in the ...
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What happens to the billions in Euros that Greece owes if it leaves the Euro

Greeces owes billions of Euros to the IMF and European Union. What happens to those debts if it leaves the Euro? Do the debts get translated into Drachma or can the government just print Drachma to ...
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Why do indebted governments fear deflation?

It's widely accepted among people who follow finance that various governments around the world, including the US government, are doing (or their central banks are doing) everything possible to keep ...
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Is it possible to eliminate the U.S. national debt?

A political science teacher of mine has said that the U.S. national debt has grown way beyond reach and is now just a political talking point with no real value. He says that there is no point in ...
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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 ...
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GDP and DEBT/GDP ratio of a Nation [closed]

Imagine following tiny nation. It consist only of 100 people running a car manufacturing plant. The nation imports every resource it needs for manufacturing those cars. It also imports all energy, ...
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Government spending/borrowing difference/ national debt increase disparity

My background in economics is non-existant, I'm just doing some research before the UK general elections and am having some difficulty in understanding certain data. Assuming the figures found in ...