Excessive Debt Burden Research Articles

Methodological tools for assessing the level of indebtedness of the population of the Russian Federation

The article examines the phenomenon of indebtedness of the Russian population, which is currently considered in two aspects: as an indicator of the debt burden, characterizing the ratio of all incomes and all obligations (debts) of citizens, and as an indicator of the “excessive” credit burden of the country’s population, when the volume of obligations of individuals under credit agreements and loans exceeds their financial capabilities. In the study, the authors, based on statistical data, identifies certain relationships between indicators of excessive debt burden and those of economic growth in Russia, as well as the impact of the population’s debt burden on the country’s GDP.

Perceptions of Stakeholders on the Financial and Economic Crisis in Lebanon: an in-Depth Analysis

Purpose: The objective of this study is to delve into the root causes of Lebanon's severe economic crisis. This crisis has been exacerbated by a confluence of factors, including the impact of the COVID-19 pandemic, pre-existing economic difficulties, and the devastating Beirut explosion. The aim is to uncover the fundamental drivers behind the crisis, which encompass issues such as financial mismanagement, governmental shortcomings, excessive debt burdens, intricate financial engineering practices, and political unrest. Methodology: Employing a quantitative methodology, this research leverages a survey of 178 pertinent stakeholders. The approach encompasses both descriptive analysis and factor analysis. Descriptive statistics were calculated for each variable, providing a comprehensive overview of the perspectives held by the participants. This initial step then guided the subsequent process of factor analysis, which was executed utilizing Principal Component Analysis (PCA) as the technique. Findings: The results disclose a complex array of factors that have collectively contributed to the current economic turmoil in Lebanon. The presence of a dominant underlying component indicates a strong association between variables related to financial mismanagement, government failures, public debt, financial engineering techniques, and political instability. These factors play a substantial role in driving the crisis, indicating an intricate web of interrelated elements contributing to the country's financial downturn. Research Limitations/Implications: While this study provides valuable insights into the origins of the crisis, it is important to acknowledge certain limitations. The research primarily relies on quantitative data and stakeholder surveys, which may not capture the entirety of the complex socio-political and economic dynamics at play. Additionally, the study does not delve deeply into potential geopolitical factors that may also be influencing the crisis. Originality/Value: This research contributes to the existing body of knowledge by offering a data-backed analysis of the Lebanon economic crisis. The identification of specific drivers such as financial mismanagement, governmental failures, and political unrest provides a foundation for targeted policy recommendations. The study emphasizes the importance of implementing prudent fiscal practices, governance reforms, and tailored policies to address the crisis and prevent similar situations in the future.

Research of savings behaviorhouseholds (by the example of the Amur region)

The article analyzes the savings behavior of the Amur region population. It was noted that the development of the economy characterized by the decaying growth rates of de-gentle incomes and spending of the population, which began during the crisis of 2008-2009, and then a sharp decline in 2016 until the prerequisites for the transition to a higher "corridor" the growth rates of these indicators. in general, for 2010-2020. the population savings were reduced by 15 %, during individual periods (2017-2018) the fall in this indicator was even more expensive, which is primarily due to the stagnation of real money income and spending on durable goods. Against the background of the growth of expenses and reduce savings, the continued increase in mortgage loan goods was revealed. the current trends can lead to significant economic and social problems, since the excessive debt burden associated with a reduction in the volume of savings of the population carries the threat of mass bankruptcies, a decrease in the investment activity of economic entities and the solvency of banking sector entities and the imbalance of the economy as a whole. A number of measures aimed at maintaining the level of personal finances of households are proposed.

Управління державним боргом України на сучасному етапі

Abstract. Introduction. The problem of public debt management is one of the main problems in Ukraine. Public debt has a significant impact on the financial system, the state of the economy in the country investment climate, national currency stability. The rapid growth in volumes of a gross external debt and in ratio to GDP increases the currency risks of the country. That’s why public structures must form and implement a clear process of public debt management. Purpose. The main purposes of the article are to investigate the theoretical aspects the management of the external state debt in Ukraine, to analysis of the current state of public debt, to identify the main problems the management of the external state debt and search for ways to improve it. Results. It was researched that the growth of the state debt and expends of its servicing are gaining in Ukraine. It was determined that the structure of public debt is dominated by external debt. Also Ukraine is characterized by large amounts of stateguaranteed debt, which involve additional costs due to the insolvency of borrowers. Ukraine has excessive debt burden mainly through external borrowing. During the study period, the maximum amount of public debt has long exceeded the norms approved by the Budget Code, although in the last two years there has been a stabilization. Therefore, a range of debt management actions have been proposed that can alleviate the problem of over-indebtedness in Ukraine and mitigate the risks associated with a distorted debt structure. As such, debt policy of a government must be based on gradual repayment of debt in foreign currency, optimization of state expenditures, improvement of the system of the national debt, refinement of the conditions by which governments service their debt, etc. Thus the government's debt policy should be based on an improved legal framework for regulating public debt; public debt restructuring; rational and targeted use of loans. In addition, the country should introduce strict control over the spending of funds, ensuring the political and economic development of Ukraine and take incentives to intensify the stock market.

Growth in the debt burden of the global economy: the scale and directions of counteraction in the context of the crisis

The article analyzes the key aspects of the debt burden, which has taken on an unprecedented scale in the economies of developed and developing countries. The coronavirus pandemic has led to a significant increase in government support for households and companies, while the volatility of global financial markets has increased. Given the continuing uncertainty about the further recovery of the global economy, the timing of countries’ return to pre-crisis levels of borrowing remains unclear. At the same time, we note a growing mismatch between risk assessments in financial markets and the expected outlook for economic recovery. Central banks of countries have taken unprecedented measures to counter the growth of debt burden, but in developing countries, the limited fiscal space does not allow effective measures to prevent the continued growth of debt. The article also notes that the cheapness of new loans is an aggravating factor in the growth of borrowings and the deterioration of the balance of payments. The author came to the conclusion that a sharp increase in public debt in many countries will preserve the vulnerability of the world economy, therefore, it is necessary to carefully adjust the fiscal policies of the countries of the world, modernize fiscal risk management strategies and modernize tax reforms. In addition, in conditions of high debt, approaches to assessing the risks of attracting foreign direct investment are changing, which in the future will have a significant impact on the redistribution of international capital flows. However, even in the face of excessive debt burden, governments need to continue lending support to households and companies in shortterm policies, in parallel with measures to manage capital outflows and achieve exchange rate flexibility.

Debt sustainability of the Argentine Republic: Problems and prospects

Subject. The article reveals the relationship between the increasing cost of servicing the current government debt and ensuring the debt sustainability of default economy, on the case of the Argentine Republic. Objectives. The study aims at conducting a comprehensive analysis of origins and mechanisms for resolving debt crises in the Argentine Republic. Methods. The study rests on methods of analysis, synthesis and extrapolation, using the database of the IMF, the Ministry of Economy, and the Central Bank of Argentina. Results. We discuss the approaches of the administration and the Central Bank of Argentina to the implementation of anti-crisis fiscal and monetary policy, reveal the details of Argentina's interaction with the IMF in providing assistance in the financial stabilization of the economy, show the economic consequences of excessive debt burden, present the data on the repayment of Argentina's public debt in the long run. The paper summarizes the distinctive features of the current debt of Argentina restructuring, including the increasing socio-economic and political risks. Conclusions. The distrust in debt securities and creditworthiness in the Argentine Republic increases the risk of serial default. The lack of the State's ability to provide financial support to the national corporate sector is reflected at the level of poverty, unemployment, and, as a result, it has an impact on the mood of the population, which threatens the intensity of riots that may spread outside the Argentine Republic.

Foreign Capital, Real Sector Financing and Excessive Leverage in Turkey: What Went Wrong?

Recently, large swings in inflation and exchange rates revealed that non-financial sector is heavily geared and extremely vulnerable. Therefore, a study trying to identify the contributing factors is needed. Separating firms into groups, based on size and stock market trading status; changes in financing patterns are investigated via panel data methodology. The study aims at fulfilling the need for analyzing the consequences of foreign capital flow at firm level and documenting its significance in addition to assessing the efficacy of contemporary monetary policy. Economic conditions significantly facilitated lending process, strengthening corporate access to credit, and resulted in excessive borrowing both in the form of foreign and domestic currency. With such heavy burden of debt, non-financial sector has been facing both exchange rate and the liquidity risks. The more severely a firm was previously challenged by financing limitations, the more it borrowed once the limitations are relaxed, contributing to excessive debt burden of the economy in proportion to its previous financing challenges.

Rising student loan burdens and what to do about them

Student loans help many individuals obtain higher education that they otherwise could not fund, but concerns have arisen in recent years about the large number of borrowers that appear to be struggling to make their payments. This article considers the economic consequences of excessive student debt. It then turns to policy options for relieving excessive debt burdens—most notably, the debate over student debt forgiveness and ways to change the federal student loan program to limit the number of new borrowers that will struggle to make debt payments.

ASSESSMENT OF THE INTEGRATED DEBT SECURITY INDEX OF UKRAINE

The major problem of the current financial system of Ukraine is the critical condition of public debt. Its formation was unsystematic with operational financing of current budget expenditures that influenced its structure and dynamics. Ensuring the stability of the financial system and keeping the debt burden within safe limits, or at least ensuring its permanence, are Ukraine's debt policy's primary tasks. Simultaneously, the system of debt security indicators is an instrument for assessing the country's financial system's ability to meet its debt obligations. The article provides a list of key indicators of debt security, compares their limits in Ukraine and in world practice. This study is aimed to outline the scientific and methodological approach to determining the state debt security condition. It was developed on the basis of a quantitative assessment of relevant indicators, their further grouping, which allows analyzing the potential threats and sources of instability, predicting their future dynamics, and calculating the integrated debt security index of Ukraine. The main idea of the methodology for assessing the integrated debt security index is to evaluate the country`s debt security level in a certain period as a single summary indicator. Indeed, all threats and destabilizing factors measured by some debt security indicators might be taken into special consideration. However, their cumulative impact provides an overall result and allows assessing the overall debt security level. The analysis of the calculated integrated debt security index will allow timely react to potential threats and neutralize the risks caused by an excessive debt burden. Methods for rationing debt security indicators have been reviewed, taking into account the advantages and disadvantages of each of these methods – the optimal one has been chosen. The study covers the period from 2009 to 2019. The analysis of the debt security dynamics and the integrated index let on concluding that the debt situation in Ukraine is unstable, and there is a significant increase in debt over the past 11 years. Unsatisfactory values of both individual debt security indicators and the integrated index indicate the need for serious attention of public authorities and the need to optimize the management of Ukraine’s debt security in the system of economic security.

Problems of loan population in Russia

The article is devoted to the consideration of such a phenomenon as the debt load of the country’s population on the example of Russia. The term “debt” means the ratio between debt obligations and available income. Assessing the level of debt or, in other words, the debt burden of Russian citizens is relevant, because real disposable incomes have a rather long downward trend, and consumer unsecured lending is becoming more affordable, the amount of debt to Russians to creditors is increasing year by year, while the share of overdue liabilities, although not very large, still poses certain risks. This situation increases the level of debt to citizens, which poses serious challenges for the socio-economic development of the state, since excessive debt burden can lead to a crisis (as, for example, in the USA in 2008). Therefore, it is especially important to soberly assess the level of debt load and take appropriate measures in time to regulate it, in particular, to cool the consumer lending market as the most volatile segment of lending to individuals.

Fiscal stimulus and debt burden: evidence from Thailand’s first-car-buyer tax rebate program

This paper examines the extent to which a fiscal stimulus involving durable goods induces financial distress and causes debt burden. Using account-level loan data to study the impact of Thailand’s first-car-buyer tax rebate scheme at both individual and postcode levels, we find that the program led to higher loan delinquency and crowded out other loan originations, which are symptoms implied by excessive debt burden. The adverse impacts were more pronounced for passenger car buyers than for truck buyers and there were local negative spillovers to non-participants. Our findings raise questions about the merit of promoting economic growth by inducing debt-fueled spending and suggest that the design of durable goods stimulus policy should focus more on productive business durables than on consumer durables.

Econometric Analysis of the Effect of External Debt on the Economic Growth of Nigeria

This study looks at the analysis of the effect of external debt on the Economic Growth of Nigeria from 1980 to 2017 with secondary data sourced .from Central Bank of Nigeria and Debt Management Office statistical/annual bulletins of various years. The Autoregressive Distributed Lag (ARDL) Method is employed in the estimation of the multivariate regression model. In the data analysis, External Debt (EXDT), External Debt service (EXDS), and Exchange Rate (EXCHR) were used as independent variables against the dependent variable of Real Gross Domestic Product (RGDP) which is used as proxy for economic growth. The result of the study showed that external debt has an insignificant and positive linear relationship with the level of economic growth in Nigeria, an increase in external debt by a unit will increase the level of economic growth by 0.091 units. This is an indication that external debt has the potentials of increasing the level of economic progress in Nigeria. External debt service has no significant but positive impact on the level of economic growth in Nigeria. This is not surprising since income from investment of external debts in self-liquidating projects is used in servicing the debts. Exchange rate has no significant and positive effect on the level of economic growth in Nigeria. Based on the findings, the study therefore recommends that economic managers in the country should apply foreign loans only on beneficial capital investments capable of liquidating itself rather than spend it on recurrent expenditure. This will reduce the crowding out effect of debt and debt overhang on the Nigerian economy. Only external loans with favourable terms and conditions should be sort for by the country to avoid excessive debt burden on the economy. Only low cost foreign loans should be sort for after a rigorous evaluation not on exigency to reduce the cost of the debt. Measures that will stabilize exchange rates in the country should be put in place to check its adverse effects on the economy.

A COMPARATIVE SPATIAL ANALYSIS OF THE POSSIBLE EFFECTS OF ECONOMIC CRISIS IN GREECE AND RUSSIA ON PROVINCES IN TURKEY

After 2008 global financial crisis some Europe countries which have excessive debt burden especially Greece, Iceland, Spain etc. effected negatively more than the others. On the other hand decrease in oil prices effected negatively some exporter countries for instance Russia, Venezuela etc. in this period. Greece and Russia are neighbor countries that has significant role on Turkey’s foreign trade. In this aspect, it has been occurred some potential risks for provinces in Turkey which exporting to Greece and Russia. This study aims to examine the possible effects of Greek and Russian economic crisis for provinces of Turkey by using spatial data and techniques. To identify risky areas first, it is created different choropleth maps of Turkey by using province based export data in particular Greece and Russia. Second, spatial dimensions of potential risks are discussed. To test spatial dimensions of the variables, we perform an exploratory spatial data analysis on export values for provinces of Turkey. While our choropleth maps indicate that the some part of the country is significantly more related to foreign trade of the countries than the others, the tools of spatial statistics reveal the presence of spatial dependence across provinces. The presence of heterogeneity is reflected in the distribution of LISA statistics. Overall, this paper is original in terms of analyzing spatial dimensions of a current economic issue for provinces across Turkey.

FINANCING FOR SUSTAINABLE DEVELOPMENT: SOLUTIONS OF WORLD SUMMIT ON SUSTAINABLE DEVELOPMENT

The World Summit on Sustainable Development (WSSD) held in Johannesburg, SouthAfrica 2002 has given significant priority to finance and trade issues since funding hasbeen identified as key constraints for the implementation of Agenda 21. The Summitadopted some ambitious programs specifically for poverty eradication such as halving theproportion of the world's people whose income is less than $1 a day, proportion of peoplewho suffer from hunger, proportion of people who are without access to safe drinkingwater and sanitation by 2015. Obvious.y, the implementation of all its decisions dependson the success of addressing development finance issues that covers a vast range, fromofficial development assistance to tommercialloans by multilateral financial institutionsand private banks, foreign direct investment, domestic credits, investment and governmenttransfers. The objective of this paper is to investigate whether the WSSD presents asolution to the financing for sustainable development taking Sri Lanka as a case study.The study observed that between 1992-2000 Official Development Assistant (ODA) hasfallen steadily from 0.33 % of donor country GNP to 0.22 % although at the Earth Summitdeveloped countries agreed to provide 0,7% of GNP as ODA This decline has affected theleast developed countries (LDCs), who arc highly dependant on ODA, which constitutes onthe average almost 90'% of their total long term capital inflows. However during thisperiod, Foreign Direct Investment (FDI) has significantly increased. FDI to developingcountries has increased from US$ 36 billion in 1991 to US$ 185 billion in 1999, butdeclined to US$ 175 billion in 2000. This is however is only a small portion of the globalFDI flows, which amounted to US$ 1.1 trillion in 2000. In 2000, 80% of FDI went to onlyten developing countries and LDCs attracted only 2.5 % of all FDI flows to developingcountries. In Sri Lanka, foreign direct investments have dropped from US$ 129 Mn ill1977 to US$ 82 Mn 2001. Total outstanding foreign debt has rose from Rs. 235,358 Mn in1992 to Rs. 634,622 Mn in 2001. This indicates serious debt crises in developing countries,which is not a favorable condition for attracting further FDI to developing countries.At the same time measures taken by the international community to treat the excessive debtburdens of 41 heavily indebted poor countries (HIPe) have not delivered the expectedresults. Thought the IMF and the World Bank have approved debt reduction programs for22 countries in December 2000, only' Uganda was able to clear the prerequisite thecreditors. This evidently suggests that the proposed financing measures at the WSSD willalso face implementation problems. Unless all debtors and creditors work positivelywithout demanding unreasonable prerequisite for debt relief measures, the objectives of theWSSD cannot be achieved.

What's Wrong and Right with Microfinance – Missing an Angle on Responsible Finance?

Microfinance as the best way of tackling poverty is under attack. It has been accused of failing to help the poor, of treating its clients badly, of charging high interest rates and of encouraging poor people to take on excessive debt burdens. The authors examine these issues, and find that microfinance institutions (MFIs) can have significant positive impacts, including democratization of banking services, provision of secure savings facilities for poor people, and social benefits, particularly for women. The paper looks at the way forward for microfinance, suggesting some changes that need to be implemented by MFIs, banking authorities and governments.

Intergovernmental Grants and Financial Autonomy Under Asymmetric Information

This paper analyses and compares the efficiency of alternative incentive compatible grant schemes under asymmetric information relieving subnational governments of excessive debt burden. They allow intervention into local debt, local tax or complete local fiscal policy. In the first case, separation of types can be induced by forcing recipients to inefficient high borrowing and in the second case by imposing inefficient high tax rates. In the last case, fiscal policy of the recipient region is distorted in the period of the exogenous shock. We show that constraining complete financial autonomy leads to the lowest welfare losses. This is due to the fact that complete regulation of local fiscal policy reduces the incentive of contributing local governments to defect from truthful relevation.

Letter: Comment on Stiglitz's "Turn Left for Sustainable Growth"

P.K. Rao writes that Joseph Stiglitz is right that a truly accurate assessment of economic growth must reflect loss of environmental assets, excessive debt burdens, and related features, but points out that left-leaning policies are also susceptible to capture and corruption.

Currency and Financial Crises in Turkey 2000 -2001: Bad Fundamentals or Bad Luck?

This paper attempts to explore the underlying causes of twin crises experienced by Turkey in November 2000 and February 2001. We study an extensive set of leading indicators of crises that are drawn from the existing literature. Our results identify three sets of vulnerabilities in the Turkish economy in triggering the financial crisis and bringing about the collapse of the Turkish lira. These are: first, the weak external position caused by excessive debt burden combined with the loss of competitiveness; second, the weak fiscal position resulting from the record levels of interest payments on domestic borrowing; and most importantly, third, weaknesses in the financial and banking sector. Given these observations, we argue that the success of financial sector reform is instrumental not only for putting the economy on a sustainable recovery path but also for reducing the likelihood of similar crises in the future. The general lesson to be drawn from this experience is that a sound financial system is a pre-condition for the successful operation of a fixed exchange rate regime.

Russia's Financial Crisis: Causes and Possible Remedies

A prominent Western specialist on the Russian economy surveys underlying causes of the financial crisis that beset Russia in autumn 1997 and intensified in mid-1998. He first discusses several popular explanations for the crisis (ruble overvaluation, falling oil prices, collapsing tax revenues, excessive debt burden), describing why he considers them untenable and then outlines several more plausible explanations (e.g., excessive short-term debt, regional/local government expenditures, proliferation of a barter economy, arbitrary fiscal rule, lack of protection for property rights). The author then analyzes recent international (IMF, World Bank) efforts to assist Russia and outlines additional strategies for mitigating the crisis. Journal of Economic Literature, Classification Numbers: E40, E42, E50, E62. 6 tables, 25 references.

Changing Directions in Consumer Bankruptcy Law and Practice in Europe and USA

The consumer bankruptcy or, rather, consumer debt adjustment, is a fairly recent phenomenon in continental Europe. In the nineties, a number of European countries introduced judicial institutions in order to alleviate an excessive debt burden carried by consumer debtors. In addition to the court proceedings, the European jurisdictions often provide the debtor with debt counselling services, supervision, and payment requirements. In the United States, on the other hand, discharge of debt has been an established principle of bankruptcy law since the late 19th century, and bankruptcy is frequently used by consumer debtors. However, in the US, as well as in Canada, debtors are increasingly encouraged to opt for a payment plan. There seems to be a certain convergent trend between the two different legal cultures. Paradoxically, at the same time scholars have pointed out that the variance in local cultures seems to be a main factor in explanations of how debtors choose either a direct discharge or a payment plan. This finding gives us reason to consider the interplay of counselling and other pre-trial measures and its effect upon the rights and duties of debtors.