{
  "title": "Big Bad Actors: A Global View of Debt",
  "publication": "IMF Blog, October 5, 2016",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2016/10/05/big-bad-actors-a-global-view-of-debt",
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  "summary": "Publication: Big Bad Actors: A Global View of Debt",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication: Big Bad Actors: A Global View of Debt\n- Authors: Vitor Gaspar, Marialuz Moreno Badia\n- Date: October 5, 2016\n- Central message: The October 2016 Fiscal Monitor provides the first near-global estimate of debt, showing record-high global debt that poses significant risks to the global recovery, with distinct patterns and risks across country groups."
    },
    {
      "heading": "Key global statistics and summary findings",
      "content": "- Global debt amounts to $152 trillion or 225 percent of global GDP (Chart 1).\n- Close to $100 trillion or about two thirds are liabilities of nonfinancial firms and households (private debt); the remainder is public debt.\n- High debt levels represent a major headwind against the global economic recovery and exacerbate the risk of a debt-deflation spiral."
    },
    {
      "heading": "Trends by country group",
      "content": "- Advanced economies:\n  - Deleveraging has been uneven across advanced economies (Chart 2, blue bar).\n  - Private debt ratios have continued rising in most countries within this group.\n  - Public debt has increased, partly due to migration of bad private debts onto public balance sheets.\n  - Lack of progress in deleveraging is traced mainly to the low nominal growth environment.\n  - Comparison: The United States reduced private debt much more than the euro area in the aftermath of the crisis but enjoyed higher growth rates as well (Chart 4).\n- Emerging market economies:\n  - Low interest rates have led to a surge in nonfinancial corporate debt in a few systemically important emerging market economies, notably China (Chart 2, red bar).\n  - The recent debt expansion in emerging market economies raises questions about the underlying health of fiscal positions, given historical precedents in advanced economies.\n- Low-income countries:\n  - Both private and public debt have increased thanks to deeper financial markets and improved market access, though debt ratios remain generally low.\n  - Advances in microfinance lending and mobile banking have contributed to financial inclusion.\n  - Financial development is positive provided debts remain sustainable."
    },
    {
      "heading": "Risks and implications",
      "content": "- Excessive private debt is associated with financial crises; financial recessions are longer and deeper than normal recessions and cause larger output losses and higher job losses.\n- Excessive private debt can mutate into public debt, worsening fiscal positions.\n- Weak fiscal positions amplify the severity of financial recessions (Chart 3), particularly in emerging market economies where public spending is often slashed in crises.\n- Even absent a crisis, high private debt can hamper growth as indebted borrowers cut consumption and investment sharply.\n- The historical analogy to Irving Fisher: too high debt and too low inflation are persistent dangers, especially for advanced economies."
    },
    {
      "heading": "Policy recommendations and corrective measures",
      "content": "- Avoidance target:\n  - Debt is fundamental for entrepreneurship and innovation; the policy focus should be on avoiding excessive private debt, not debt per se.\n- Regulatory and supervisory measures:\n  - Ensure monitoring and sustainability of private debt through regulatory and supervisory policies.\n- Tax policy:\n  - Gradually phase out tax distortions favoring debt over equity in corporations, financial and non-financial.\n- Growth-friendly fiscal policies:\n  - Use growth-friendly fiscal policies to facilitate adjustment in countries mired in excessive private debt, depending on country circumstances and available fiscal resources.\n  - Resources may come from prior saving and reducing public debt in good times.\n- Crisis-resolution tools where financial systems are under severe stress:\n  - Early resolution of underlying problems is critical.\n  - Government-sponsored programs to reduce private debt (for example, subsidies for creditors to lengthen maturities or guarantees) and measures to accelerate balance-sheet cleanups (for example through asset management companies) can be highly effective.\n- Design principles to minimize costs and moral hazard:\n  - Target measures to specific sectors or individuals.\n  - Subject interventions to conditionality.\n  - Involve burden sharing with borrowers.\n  - Accompany interventions with strong insolvency and bankruptcy procedures.\n- Complementary policies:\n  - Fiscal policy must be supported by monetary and structural policies, implemented within consistent and credible policy frameworks."
    },
    {
      "heading": "Concluding outlook",
      "content": "- The authors argue for eliminating the “big bad actors” of excessive debt and low inflation and emphasize the need for coordinated, well-designed fiscal, regulatory, monetary, and structural policies to enable a transition toward a renewed acceleration in nominal growth.\n\nSource: Big Bad Actors: A Global View of Debt, Vitor Gaspar and Marialuz Moreno Badia, October 5, 2016.\n\n---\n\n Content in this bundle\n\n- “大反派”：债务问题纵览, 作者：Vitor Gaspar和Marialuz Moreno Badia, iMFdirect, 2016年10月5日\n  - “大反派”：债务问题纵览, 作者：Vitor Gaspar和Marialuz Moreno Badia, iMFdirect, 2016年10月5日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - “大反派”：债务问题纵览, 作者：Vitor Gaspar和Marialuz Moreno Badia, iMFdirect, 2016年10月5日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 巨悪に立ち向かう：債務の世界的な情勢; ヴィトル・ガスパル、マリアルス・モレノ・バディア, iMFdirect; 2015年10月5日\n  - 巨悪に立ち向かう：債務の世界的な情勢; ヴィトル・ガスパル、マリアルス・モレノ・バディア, iMFdirect; 2015年10月5日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 巨悪に立ち向かう：債務の世界的な情勢; ヴィトル・ガスパル、マリアルス・モレノ・バディア, iMFdirect; 2015年10月5日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Staff Discussion Note\n  - Staff Discussion Note (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Staff Discussion Note (PDF){rel=\"external\" type=\"application/pdf\"}\n- Крупные негативные факторы: глобальный взгляд на долг\n  - Крупные негативные факторы: глобальный взгляд на долг (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Крупные негативные факторы: глобальный взгляд на долг (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- عربي\n- Read the report\n- Fiscal issues at the IMF\n- Fiscal Monitor\n- https://www.imf.org/wp-content/uploads/2016/09/global-debt-record-highs.gif\n- https://www.imf.org/wp-content/uploads/2016/09/countries-not-in-same-boat.gif\n- https://www.imf.org/wp-content/uploads/2016/09/weak-fiscal.gif\n- https://www.imf.org/wp-content/uploads/2016/09/fast-deleveraging.gif\n\nSource: https://www.imf.org/en/blogs/articles/2016/10/05/big-bad-actors-a-global-view-of-debt"
    }
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    "Authors: Vitor Gaspar, Marialuz Moreno Badia",
    "Published: October 5, 2016",
    "Publication: Big Bad Actors: A Global View of Debt",
    "Authors: Vitor Gaspar, Marialuz Moreno Badia",
    "Date: October 5, 2016",
    "Central message: The October 2016 Fiscal Monitor provides the first near-global estimate of debt, showing record-high global debt that poses significant risks to the global recovery, with distinct patterns and risks across country groups.",
    "Global debt amounts to $152 trillion or 225 percent of global GDP (Chart 1).",
    "Close to $100 trillion or about two thirds are liabilities of nonfinancial firms and households (private debt); the remainder is public debt.",
    "High debt levels represent a major headwind against the global economic recovery and exacerbate the risk of a debt-deflation spiral.",
    "Advanced economies:",
    "Emerging market economies:",
    "Low-income countries:",
    "Excessive private debt is associated with financial crises; financial recessions are longer and deeper than normal recessions and cause larger output losses and higher job losses.",
    "Excessive private debt can mutate into public debt, worsening fiscal positions.",
    "Weak fiscal positions amplify the severity of financial recessions (Chart 3), particularly in emerging market economies where public spending is often slashed in crises.",
    "Even absent a crisis, high private debt can hamper growth as indebted borrowers cut consumption and investment sharply.",
    "The historical analogy to Irving Fisher: too high debt and too low inflation are persistent dangers, especially for advanced economies.",
    "Avoidance target:",
    "Regulatory and supervisory measures:",
    "Tax policy:",
    "Growth-friendly fiscal policies:",
    "Crisis-resolution tools where financial systems are under severe stress:",
    "Design principles to minimize costs and moral hazard:",
    "Complementary policies:",
    "The authors argue for eliminating the “big bad actors” of excessive debt and low inflation and emphasize the need for coordinated, well-designed fiscal, regulatory, monetary, and structural policies to enable a transition toward a renewed acceleration in nominal growth.",
    "**“大反派”：债务问题纵览, 作者：Vitor Gaspar和Marialuz Moreno Badia, iMFdirect, 2016年10月5日**",
    "**巨悪に立ち向かう：債務の世界的な情勢; ヴィトル・ガスパル、マリアルス・モレノ・バディア, iMFdirect; 2015年10月5日**",
    "**Staff Discussion Note**",
    "**Крупные негативные факторы: глобальный взгляд на долг**",
    "[عربي](http://blog-montada.imf.org/?p=4501)",
    "[Read the report](http://www.imf.org/external/ns/cs.aspx?id=262)",
    "[Fiscal issues at the IMF](http://www.imf.org/external/np/exr/key/fiscal.htm)",
    "[Fiscal Monitor](http://www.imf.org/external/pubs/ft/fm/2016/02/fmindex.htm)",
    "[https://www.imf.org/wp-content/uploads/2016/09/global-debt-record-highs.gif](https://www.imf.org/wp-content/uploads/2016/09/global-debt-record-highs.gif)",
    "[https://www.imf.org/wp-content/uploads/2016/09/countries-not-in-same-boat.gif](https://www.imf.org/wp-content/uploads/2016/09/countries-not-in-same-boat.gif)",
    "[https://www.imf.org/wp-content/uploads/2016/09/weak-fiscal.gif](https://www.imf.org/wp-content/uploads/2016/09/weak-fiscal.gif)",
    "[https://www.imf.org/wp-content/uploads/2016/09/fast-deleveraging.gif](https://www.imf.org/wp-content/uploads/2016/09/fast-deleveraging.gif)"
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