POSC 3250 Lecture Notes - Lecture 9: Debt Service Ratio, Debt Crisis, Global Recession
29 Mar 2016
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Document Summary
Many states have held large public sector debts: debts in foreign currency. Foreign exchange required to make payments: debt crisis parially a balance of payments problem- lower income states" debt crisis started by current account deicits. Financed by unsustainable borrowing from private foreign banks: more of a problem if you can"t borrow in your own currency. What makes a state"s debt crisis severe: size of the debt vs. ability to generate foreign exchange for payments. Balance of your external payments and the value of your exports: if debtors can"t raise foreign exchange to make payments. What were the risks of the debt crisis: by 1980s crisis was widespread- threatened: What were the poliics of the debt crisis: north, orthodox/neo-liberals and ifi"s. Cause poor domesic policies & unwillingness to adjust. Challenge: risk to the stability of internaional inancial system and banks: south, intervenionist liberals, historical structuralists, dependency theorists. Cause: failure of internaional inancial system and/or capitalism.
