2000s: painful and turbulent decade of debt. How did we end up in this mess?

Chaiechi, Taha (2013) 2000s: painful and turbulent decade of debt. How did we end up in this mess? In: Mirdala, Rajmund, (ed.) Financial Aspects of Recent Trends in the Global Economy. Financial Aspects of Recent Trends in the Global Economy, 1 . ASERS Publishing, Craiova, Romania, pp. 176-191.

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Abstract

Around the globe observations demonstrate that the countries with expected near- future- inflation, unsustainable ballooning government spending and expected recession head towards a financial crisis unless significant policy transformations take place convincingly and before late. And whilst the recent sharp increase in advanced country sovereign debts has led to serious concerns about fiscal sustainability as well as their broader economic and financial market impacts, research on the relationship between sovereign or public debt and economic growth remains sparse, particularly from an empirical perspective.

To avoid another chaotic catastrophe the trends of the sovereign debt and macroeconomic performance of countries needs to be watched closely. The projection of the future patterns based on the past and current trends are imperative since it will provide adequate safety net before another financial calamity arrives. Needless to say if the extent of sovereign debt for a nation is too large to finance and service, bankruptcy is very likely to occur and by then there will be little motivation for other countries to cooperate with the system in finding an immediate solution.

Item ID: 28874
Item Type: Book Chapter (Research - B1)
Keywords: financial crisis, sovereign debt, federal budget, fiscal sustainability
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ISBN: 978-606-93129-6-4
Date Deposited: 21 Aug 2013 06:05
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140212 Macroeconomics (incl Monetary and Fiscal Theory) @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910105 Fiscal Policy @ 70%
91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910103 Economic Growth @ 30%
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