Private and Public Debt : Are Emerging Markets at Risk?

Author/Editor:

Marco Bernardini ; Lorenzo Forni

Publication Date:

March 22, 2017

Electronic Access:

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Summary:

Using a dataset covering a large sample of emerging economies (EMEs), we study the relationship between debt and economic performance in bad times. While previous research has shown that private debt buildups exacerbate the duration and intensity of recessions in advanced economies (AEs), we document that this effect is very pronounced in EMEs as well. Moreover, although rapid public debt buildups are unlikely to be the primary trigger of financial crises, in EMEs they are associated with deeper and longer recessions than in AEs. Part of this difference is explained by a less supportive fiscal policy in EMEs during crises.

Series:

Working Paper No. 17/61

Subject:

English

Publication Date:

March 22, 2017

ISBN/ISSN:

9781475588170/1018-5941

Stock No:

WPIEA2017061

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

38

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