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Managing the Coming Global Debt Crisis
Article

Managing the Coming Global Debt Crisis



Editorial Rating

8

Qualities

  • Analytical
  • Bold
  • Overview

Recommendation

Developing economies are facing their worst debt burdens since 1982, according to economist Barry Eichengreen in this sobering commentary. Back then, creditors took years to put together an effective plan of action. But this time, Eichengreen says, the world cannot wait; debt moratoriums are at best a palliative, and any solution has at stake the welfare of billions of people. Economists and activists will find Eichengreen’s prognostications dire but his recommendations sound. 

Take-Aways

  • Emerging markets are facing a credit catastrophe of unrivaled magnitude.
  • The US dollar-based international monetary system straitjackets developing countries’ management of their fiscal and monetary policies.
  • A new plan must address this fast-worsening debt crisis, which could become a humanitarian tragedy.

About the Author

Barry Eichengreen, a former senior policy adviser at the International Monetary Fund, is a professor of economics at the University of California, Berkeley.