Interest rates and international debt crisis

Abstract

It has often been claimed that the international debt crisis has been made worse by the high level of interest rates payable on the debt. The purpose of this article is to analyse the recent evolution of interest rates and the contribution this has made to precipitating the crisis. A recent history of interest rate movements is presented, together with some relevant debt figures. This leads to an examination of various explanations of the debt crisis and the role that high interest rates may have played in the problem.