Debt Cancellation Research Articles

Small states in the perfect storm: crisis management and economic credibility in Ireland’s and Iceland’s financial crises

Despite having lived through some of history’s greatest financial and economic crises, the two small open economies of Iceland and Ireland are now enjoying relatively high growth rates and declining unemployment, and are broadly regarded as success stories of effective economic turnarounds. In both countries, policy focused on restoring the confidence of international capital markets, but whereas Icelandic crisis management has compensated the people worst hit by the crisis through socially balanced austerity and debt cancellation, Ireland’s austerity followed a more orthodox, European approach with significant inequality-creating effects. Iceland’s heterodox approach was made possible through capital controls and a devaluation of the currency, while Ireland could neither devalue nor write down bank debt. The article shows how the dependence on international capital markets and the abandonment of independent monetary policy restrict the flexibility small states have previously enjoyed and increase dependence on fortunate developments in the world economy.

External Debts and Economic Growth in Nigeria: An Empirical Study Using Autoregressive Distributed Lag Model

This paper models some economic theories which explained the casual relationship between accumulated funds/loans from external sources (external debts) and economic growth with a more focus on Nigerian economy, as it is a usually trend for debts of third world and developing countries debts profile to be high, and this case is also the same with Nigeria as the country debts profile is on the increase once more after the debt cancellation of 2005 by the Paris Club of creditors. Also, the addition to empirical studies on this topic by this study is the use of Autoregressive Distributed Lag (ADL) model to capture the effect of externals debts on viability and growth of Nigerian economy from 1984-2012. The preliminary and normality tests show that all variables used in the study are positively skewed but are not normally distributes. For more diagnostic analysis of the dataset, econometric tests of stationarity (Unit Root Test) and co-integration tests were employed to avoid a spurious regression. The results of these tests indicated that all the variables exhibit Stationarity at first differenced, and also the Johansen Co-integration test shows the existence of long-run relationship between the variables. The result from the ADL model confirms the existence of a dual behaviour and effect of External Debts on Nigeria Economy. The lag 1 of external debts i.e Debts from previous, has positive effect while external debts of present year posed a negative effect on the performance of the economy. The recommendations of this study are that Nigeria government should ensure that debts incurred are channel towards productive uses and debt management office of the government should strengthen its plans and foster appropriate use of loans in the critical area the need for is identified.

Comportamiento de la deuda pública del Gobierno Central de Honduras 2002–2012

En los últimos años, la deuda pública es una de las variables macroeconómicas de estudio y de las más críticas producto del alto endeudamiento y persistentes déficits fiscales en varios países europeos como: Grecia, España e Italia, entre otros. Adicionalmente, el cambio de forma reiterada del techo de la deuda de Estados Unidos y el elevado endeudamiento de Japón, sumado al incumplimiento del pago de la deuda en el caso de algunos países de Latinoamérica, por ejemplo Venezuela, Ecuador, Brasil, México, Costa Rica y Argentina, fueron factores que afectaron su desempeño económico.El objetivo de esta investigación es analizar el comportamiento de la deuda pública del Gobierno Central de Honduras en el periodo de 2002–2012, a través de la explicación de la tendencia, ciclos, composición de los componentes para establecer sus características y el diagnóstico de los indicadores e índices macroeconómicos en materia fiscal con respecto al endeudamiento público del Gobierno Central.El endeudamiento público del Gobierno Central mostró un comportamiento con altibajos en el periodo del año 2002 a 2012, inicialmente experimentó una disminución del año 2005 a 2007 producto de la condonación de la deuda pública externa; pero, en los años posteriores se incrementó. Las causas del endeudamiento varían, del año 2002 a 2007 fueron resultado del financiamiento de la inversión pública; en cambio, del año 2008 a 2012 su crecimiento fue producto especialmente del excesivo aumento del gasto corriente, sumado a la crisis financiera mundial y política interna de 2009, situaciones que modificaron su estructura al pasar el endeudamiento público interno de un 10 % del total en el año 2002, a aproximadamente el 50 % en el año 2012; asimismo, el endeudamiento incrementó su proporción con respecto al PIB, empeorando la situación financiera fiscal, escenarios por los cuales Standard & Poor's y Moody's disminuyeron la calificación de riesgo en la inversión de deuda varias veces en el año 2012, situación que no favorece al fomento de la inversión y al crecimiento económico a largo plazo.Revista Ciencia y Tecnología No. 17, diciembre 2015 pp.135-159

ECONOMETRIC ANALYSIS OF EXTERNAL DEBT, EXCHANGE RATE AND ECONOMIC GROWTH IN NIGERIA

(ProQuest: ... denotes formulae omitted.)INTRODUCTION:In a study linking public debt to development, Udoka and Ogege (2012) stated that Nigeria has a long history of external indebtedness that dates back to the pre -independence period. But the magnitude of the debt was small until 1978, and the debts incurred before 1978 were mainly long -term loans from multilateral and official sources such as the World Bank and Nigeria's major trading partners. The impact of the debts on the economy was not much as the loans were obtained on soft terms. However, the huge revenue receipts from the oil sector especially during the oil boom of 1973 -1976 was enough to absorb any negative impact the debt burden would have on the economy (DMO, 2011).Prior to the debt cancellation deal of the 18 billion US Dollars in 2005, Nigeria ranked the largest debtor nation in Sub-Saharan Africa. Available statistics has shown that the external debt stock of Nigeria has been on the increase after the debt cancellation deal in 2005. The country's external outstanding debt stood at N451,461.70 Million in 2006 and 1,026,904.00 Million in 2012 respectively (CBN, 2012). The outstanding external debt stock of Nigeria stood at USD9,711.45 Million at the end of December 2014, compared to USD8,821.55 Million at the end of the corresponding period in 2013 (CBN, 2014).According to the Debt Management Office (DMO) 2014 annual report the increase was largely attributed to additional disbursement from existing and newly approved loans that became effective during the period, as well as net adverse cross exchange rate movements between the different currencies in the external loan portfolio. From the DMO annual report (2014), bilateral creditors comprised of loans contracted from China and France on semi concessional terms. The debt owed to bilateral creditors amounted to USD1,412.08 Million at the end of 2014 compared to USD1,025.70 Million at the end of 2013, and this was largely due to loans contracted from the Exim Bank of China during the referenced period. The multilateral loans accounted for USD6,799.36 Million or 70.01 per cent of the external debt portfolio in 2014. The trend analysis of the external debt stock between 2010 and 2014 revealed that the share of multilateral debt decreased marginally from 71.13 per cent in 2013 to 70.01 per cent in 2014.Aluko and Arowolo (2010) observed that despite the fact that external debt has hardly expended, the management of the debt by way of servicing repayment, which usually is in foreign exchange, has affected the macroeconomic performance of the Nigerian economy. Also, Pattillo, Poirson and Ricci (2002) observed that large debt service is expected to have negative impact on economic performance because of the uncertainty regarding the portion of the debt that will be serviced with the country's own resources.The main objective of this study is to examine the relationship between external debt, exchange rate and economic growth in Nigeria. Several researchers in the past have investigated the relationship between external debt, exchange rate and economic growth. But these studies have come out with diverse views without a consensus in their findings. This study is therefore designed to contribute to existing knowledge and find if an empirical consensus can be reached.The rest of the paper is structured as follows: section two provides a brief review of related empirical literature followed by the methodology of the study in section three. The succeeding section presents the empirical results of the study and discussions while section five provides the conclusion of the study and the recommendations based on the study findings.REVIEW OF EMPIRICAL LITERATURE:The issue of external debt and economic growth has been well documented in the body of literature in recent times with diverse views with no consensus conclusion by scholars and researchers. In addition, Nigeria experiences dynamism in exchange rate movement due to the fact that major currencies of the world are traded freely in the autonomous market. …

A Study on Legal Structure of Debt Cancellation and Debt Suspension of Credit Card

A Study on Legal Structure of Debt Cancellation and Debt Suspension of Credit Card

Serial payers, serial losers? The political economy of Argentina’s public debt

A global neoliberal architecture has enabled many countries to increase their public debts to meet their fiscal needs. But since 2008 a number of European and North American economies have faced financial crises induced by unsustainable debts. This paper analyses the case of post-default Argentina since 2001, so as to better comprehend the political economy of public debt, especially in cases where governments are elected on anti-austerity platforms. Presidents Néstor and Cristina Kirchner were committed to a debt-reduction policy, yet Argentina faced a new, ‘selective’, default in 2014. This paper analyses how the country has been trapped in a cycle of debt dependency, which can only be interrupted by a comprehensive audit of the debt’s legitimacy followed by debt cancellation. Critical lessons are provided for other countries facing similar situations.

Reconsidering the appropriate discount rate for tax shield valuation

This paper aims at identifying the appropriate discount rate for tax shield valuation in a setting where a partial default is possible and either principal or interest payments are prioritized in default. As a general valuation framework we use the stochastic discount factor. We assume a tax framework with corporate taxes, tax-deductible interest payments of the firm, no taxes on the cancellation of debt and no personal taxes. We strictly decompose the payments owed to the debtholders into interest and principal payments and analyze discount rates of those claims for the different priorities. As a result of the single-period analysis we find that the discount rate for tax savings, i.e., the conditional expected return on tax savings, is always equal to the discount rate of debt only for a proportional loss distribution on interest and principal payments. If losses are distributed according to one of the priority assumptions, the discount rate of tax savings behaves different from the discount rate of debt and both discount rates are equal only in very special cases. Furthermore, we derive qualitative statements for the relation between the discount rate of debt and the discount rate of tax savings assuming certain correlations between the stochastic discount factor and the debt repayments. Finally, we show how the prioritization assumptions can be implemented in a multi-period setting. We obtain for the presented set of assumptions a pricing equation equivalent to the one by Miles and Ezzell (J Finance 40:1485–1492, 1985).

Odious Debt and Jus Post Bellum

Odious debt concerns the repudiation and cancellation of debt accrued by a State for ‘odious’ purposes. This article argues that odious debt can play a role in jus post bellum in lessening the financial burden placed on States who experience conflict and generate a clear standard for investors who seek to enforce a State’s obligations to repay its debts and other financial obligations after conflict. This article highlights several challenges inhibiting the translation of the proposal of odious debt into an international legal principle. It offers a conception of odious debt that seeks to resolve these challenges by aligning with other areas of public international law which operate concurrently. This article considers how international human rights law could give clear meaning to the contested term ‘odious’, how to conceive of the appropriate standard of care for creditors and examines potential institutions for debt resolution and potential incentives of relevant actors.

When rights need to be (re)claimed: Austerity measures, neoliberal housing policies and anti-eviction activism in Spain

Banks in Spain are receiving millions of euros of taxpayers’ money, while hundreds of home owners are being evicted. Unable to continue paying their mortgages because of unemployment or insecure employment, people are chaining themselves to their houses or other symbolic buildings; embarking on indefinite hunger strikes; and suing banks for contract abuse. In effect they are responding to the crisis by claiming and affirming their right to decent housing. Using media, legal-judicial and activist discourses, this commentary investigates the innovative political and legal tactics of the Spanish anti-eviction protests regarding: legal claims, court mediation, dation in payment (full cancellation of mortgage debt when a property is returned to the bank) and the right to relocation. It is argued that, in response to their being constructed by the state as legally incapable, evicted families and individuals are enacting themselves as activist citizens when (re)claiming their right to decent housing.

The Economic Model of Forgiveness

AbstractIt is sometimes claimed that forgiveness involves the cancellation of a moral debt. This way of speaking about forgiveness exploits an analogy between moral forgiveness and economic debt‐cancellation. Call the view that moral forgiveness is like economic debt‐cancellation the Economic Model of Forgiveness. In this article I articulate and motivate the model, defend it against some recent objections, and pose a new puzzle for this way of thinking about forgiveness.

The Concept of Welfare State in Indonesia as a Strategic Move to Win People Trust Through Economic Sustainability: Good Governance and Bank Conduct on Bank Debt Cancellation Due to Natural Disasters

Natural disasters are unavoidable events for any country and they may carry impacts on debts extended by banks to their debtors/customers. Bad debts due to natural disasters are categorized as force majeure that may result in cancellation. Such concept of debt cancellation is part of credit risks in the form of losses that banks have provided reserves for, whereas to be eligible the problem debtor must be directly affected by the disaster.In a philosophy of welfare state, the real practice of debt cancellation for those directly affected by disasters shall nurture trust value to the government of its country, where the government will then be seen as the people’s savior. In addition, not only initiate trust to the government but especially also nurturing trust towards the banks. The bank’s strategic role is as an institution providing money for funding and investments to invigorate people to expand their businesses. Having nurturing trust issues as the foundation of good conduct both in government and bank shall affect to the future more investment back to the bank which as result build a more sustainable people economy power as a strong national economic under the lead of good government. DOI: 10.5901/mjss.2014.v5n20p2498

The Simple Analytics of Helicopter Money: Why It Works — Always

Abstract The paper offers a rigorous analysis of Milton Friedman’s parable of the ‘helicopter’ drop of money – a temporary fiscal stimulus funded through an increase in the stock of fiat base money that is never completely reversed in present discounted value (PDV) terms. A monetized fiscal stimulus is more expansionary than a debt-financed one because a monetized expansion of the Central Bank balance sheet is profitable: it relaxes the intertemporal budget constraint of the State – it creates fiscal space. It is up to the fiscal authority to make appropriate use of this fiscal space. Four conditions must be satisfied for a helicopter money drop to boost aggregate demand. First, it must not be reversed fully in PDV terms. Second, there must be benefits from holding fiat base money other than its pecuniary rate of return: that is, the interest rate on any additional base money issued is below the rate of return on the Central Bank’s assets. Third, fiat base money is irredeemable – an asset to the holder but not a liability to the issuer. Fourth, the price of money is positive. Given these conditions, there always exists – even in a permanent liquidity trap – a combination of monetary and fiscal policy actions that boosts private and/or public demand demand) – in principle without limit. Deflation, ‘lowflation’ and secular stagnation are therefore policy choices. Other conclusions are: (1) the increase in the monetary base need not be permanent for helicopter money to be effective; (2) Treasury debt cancellation by the Central Bank or the purchase by the Central Bank of perpetuities (with zero, negative or positive coupons) rather than finite maturity debt are fundamentally irrelevant policy actions. At most they have signaling value; (3) dropping perishable helicopter money will make it more effective if households are liquidity-constrained.

Panacea and Perfidy of Globalisation as an Engine of Social Development in Developing Countries

The paper endeavours to validate positive aspects of globalization to social development of developing countries; as well as to critique negative aspects that globalisation poses to social development of developing countries. The paper uses literature review methodology. Globalisation has been identified as an engine of social development in facilitating: international development of policies such as MDGs; global information generation, packaging, communication and dissemination; exposure of human rights violation; advocacy of gender equality; advocacy for accountability, transparency and good governance in developing world; fighting global ills such as hunger, abuses and atrocities of all kinds; diseases such as HIV/AIDS, malaria and tuberculosis; and opening new markets for the products of the developing world. It also poses challenges of: widening inequality between developed and developing countries; is a tool of exploitation and imperialism; widens opportunities for the rich countries to extend their political power over poor countries. The paper recommends: global efforts to maximize positive aspects of social development to developing countries; negotiations between all countries to redress the challenges of globalization to developing countries; debt cancellation by the developed world to developing countries; and ensuring fair playing ground in trade between all countries.

Is the biblical perspective on poverty that “there shall be no poor among you” or “you will always have the poor with you”?

This article analyzes poverty in its ancient Near Eastern and modern contexts. Based on the release laws and vision of a society without poverty in Deuteronomy 15, it traces the development of this ideal through Jesus’ classic statement that the poor will always be there. The Deuteronomic year of release is viewed as a mechanism to address the effects of poverty in Israelite society. Beginning with a glance at the United States setting, in which poverty still abounds, the article transitions to the larger ancient Near Eastern context. Deuteronomy 15 sets the stage by critically analyzing the meaning of release laws in the historical context of the biblical economy, and whether such release meant suspension, reduction, or cancellation of debt. The release laws of the ancient Near East provide useful background to the biblical materials. The article proceeds to engage the meaning of Jesus’ famous proclamation in light of previous findings. Essentially, it argues that the implementation of release laws and other measures would have led to the idealistic vision of a society without great wealth inequities. Consequently, the article reads Jesus’ proclamation as a serious indictment on ancient Israelite society’s failure to enforce the biblical mandate to prevent poverty. The article concludes by considering the implications of poverty, release laws, and debt forgiveness in the United States and the global economy in light of ancient Near Eastern and biblical perspectives on poverty.

Joining the Party for a More Powerful Left

Joining the Party for a More Powerful Left

Islamic Economics: Where From, Where To?

The paper “Islamic Economics: Where From, Where To?” of Muhammad Nejatullah Siddiqi, a great scholar and pioneer of Islamic economics and finance, has addressed many important issues in Islamic finance and economics. These include: the role of Sharīʿah and fiqh, the assimilation of Islamic finance with conventional finance, the increasing role of debt in Islamic finance, the necessity to reduce the role of debt, the failure of Islamic finance to alleviate wealth and income inequality, the concept of isrāf, micro-finance, zakāh, awqāf, the concept of money as debt, cancellation of debt through consoles, inflation, and write-offs, inflation and exchange rate devaluation, the foreign debt burden, and prospects for commodity money and a world single currency. Siddiqi notes that conventional finance shortcomings, especially debt and debt trading, had crept into Islamic finance, rendering the latter vaguely different from the former.

Finance Is Just Another Word for Other People's Debts

In this interview David Graeber discusses the radical politics of his childhood, his own political trajectory through the globalization movement, and how Occupy Wall Street both emerged and departed from that genealogy. Turning to questions of intensifying financialization in recent years, Graeber takes analysts to task for not understanding the relationship between private debt and finance — that far from making value out of nothing, finance has been making value out of the income and debt streams of working- and middle-class people. As he traces his own intellectual ancestry from Marx to Mauss to economic anthropologist Keith Hart, Graeber also shares his vision of the present moment, in which the cancellation of private debts in some form seems inevitable and the democratization of finance and the money-creation system, increasingly possible.

On the sustainability of external debt: is debt relief enough?

Elaborating on Pasinetti (1998), the ‘geometry of debt sustainability’ (GDS) represents an analytical tool for the analysis of the long term sustainability of foreign debt. The paper focuses on debt sustainability in low-income countries, which face several major challenges simultaneously: achieving economic growth, consolidating human development goals and meeting regular debt service payments. The GDS reveals how the ‘structural’ aspect of debt sustainability—as indicated by trends in the non-interest current account—is closely interlinked with sustainability from a ‘financial’ point of view— as indicated by the relationship between the growth and the interest rate. The GDS shows why both debt cancellation and additional aid are necessary to give indebted low-income economies a chance to improve their long term economic viability.

Demosthenes onPhilanthrōpiaas a Democratic Virtue

Previous articleNext article No AccessDemosthenes on Philanthrōpia as a Democratic VirtueMatthew R. ChristMatthew R. ChristIndiana University Search for more articles by this author PDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Classical Philology Volume 108, Number 3July 2013 Article DOIhttps://doi.org/10.1086/672003 Views: 102Total views on this site Citations: 3Citations are reported from Crossref [© 2013 by The University of Chicago. All rights reserved]PDF download Crossref reports the following articles citing this article:Georgina White The Ethics of Philanthropy, The European Legacy 23, no.1-21-2 (Dec 2017): 111–126.https://doi.org/10.1080/10848770.2017.1400258Lucia Cecchet Debt Cancellation in the Classical and Hellenistic Poleis : Between Demagogy and Crisis Management, The European Legacy 23, no.1-21-2 (Nov 2017): 127–148.https://doi.org/10.1080/10848770.2017.1402516Daniel Caner , Religions 9, no.88 ( 2018): 229.https://doi.org/10.3390/rel9080229

Politics of the Debt

This essay attends to the specifics of the debt economy within contemporary finance capital: its production of profit, credit, money, taxes, and derivatives; its control of institutions and its organizational techniques; its relation to the State, to banks, to industry, to labor, and to consumption; its management of risk and of cycles of boom and bust; and so forth. It offers a detailed account of debt as a generalized means of control and a powerful mechanism for generating, maintaining, and multiplying inequalities. Yet “debt” is not so much “sovereign” as characteristic of a quasi-sovereignty that remains susceptible to conflicts and contradictions. Thus, the essay asks questions about the limits of debt and debt accumulation. It also debates the possibility of debt cancellation, notably in the context of intensifying instabilities surrounding both the concept and practice of ownership or property.