The coronavirus crisis will push sovereign-debt burdens into new territory
THIS IS NO time to fret about government debt. While cases of covid-19 soar and economic activity grinds to a halt, governments are right to throw all the resources they can at efforts to limit the pandemic’s human and economic costs. This urgency notwithstanding, the crisis will push sovereign-debt burdens into new territory. Over the past century, major global crises have often led both to large-scale borrowing by governments and to changes—often radical—in the way they handle their creditors.
The results were disastrous. Austerity undercut economic growth: output in 1928 remained below that in 1918. As a consequence, debt continued to rise, reaching 170% of GDP in 1930. Remarking on the bitter experience, John Maynard Keynes noted that “assuredly it does not pay to be good.” Other economies, forced into more desperate measures, fared even worse. Germany, weakened by war and unable to meet its debt obligations, sank into hyperinflation.
The effect was to force domestic institutions and households to lend to the government at below-market rates. As wartime price controls were relaxed, inflation rose to relatively modest levels and the rate of interest on government debt, adjusted for inflation, turned negative, and remained so for much of the ensuing decades.
日本 最新ニュース, 日本 見出し
Similar News:他のニュース ソースから収集した、これに似たニュース記事を読むこともできます。
Delivery drivers face pandemic without sick pay, insurance, sanitizerDelivery drivers face pandemic without sick pay, insurance, sanitizer by JLDastin and c_kirkham
続きを読む »
These cities and states are halting evictions during the coronavirus pandemicLawmakers in cities and states across the U.S. have implemented a moratorium on eviction amid concerns that the COVID-19 pandemic will leave many struggling to pay the rent.
続きを読む »
Peter Bjorn and John Announce 36-Hour Livestream PerformanceSwedish band rescheduled their tour due to the COVID-19 pandemic
続きを読む »
Logged On From the Laundry Room: How the C.E.O.s of Google, Pfizer and Slack Work From HomeAs chief executives hunker down during the pandemic, home offices have become corporate headquarters.
続きを読む »
BOJ braced for deeper economic trouble even after March easing: summaryThe coronavirus pandemic could plunge Japan into prolonged economic gloom, Bank ...
続きを読む »