Slow Moving Debt Crises

We study slow moving debt crises: self-fulfilling equilibria in which high interest rates, due to the fear of a future default, lead to a gradual but faster accumulation of debt, ultimately validating investors’ fear. We show that slow moving crises arise in a variety of settings, both when fiscal policy follows a given rule and when it is chosen by an optimizing government. A key assumption, in all these settings, is that the borrowing government cannot commit to issue a fixed amount of bonds in a given period. We discuss how multiplicity is avoided for low debt levels, for sufficiently responsive fiscal policy rules, and for long enough debt maturities. When the equilibrium is unique, debt dynamics are characterized by a tipping point, below which debt falls and stabilizes and above which debt and default rates grow. (JEL E43, E62, H50, H63)

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DAMPAK KEBIJAKAN FISKAL TERHADAP KINERJA SEKTOR PERTANIAN DI SULAWESI TENGGARA

Jurnal Sosio Agribisnis ◽

10.33772/jsa.v1i1.1826 ◽

2017 ◽

Vol 1 (1) ◽

Author(s):

La Ode Jabuddin ◽

Ayub M Padangaran ◽

Azhar Bafadal Bafadal

Keyword(s):

Fiscal Policy ◽

Interest Rates ◽

Agricultural Sector ◽

Simultaneous Equations ◽

Poor People ◽

Land Area ◽

Factors Affecting ◽

Historical Simulation ◽

The Impact ◽

Direct Expenditure

This study aims to: (1) Knowing the dynamics of fiscal policy and the performance of the agricultural sector, (2) Analyze the factors that influence fiscal policy and the performance of the agricultural sector, and (3) Analyzing the impact of fiscal policy on the performance of the agricultural sector. The data used in this study were pooled 2005-2013 data in the aggregate. Econometric model the impact of fiscal policy on the performance of the agricultural sector is built in the form of simultaneous equations, consisting of 7 equations with 25 total variables in the model, 7 endogenous variables, 12 exogenous variables, and 6 variables lag. The model is estimated by 2SLS method SYSLIN procedures and historical simulation with SIMNLIN procedure.The results showed that: (1) The development of fiscal policy in Southeast Sulawesi from year to year tends to increase, (2) The performance of the agricultural sector from the aspect of GDP has decreased, from the aspect of labor is still consistent, in terms of investment to grow positively, and assign roles which means to decrease the number of poor people, (3) factors affecting fiscal policy is local revenues, equalization funds, other revenues, as well as the lag fiscal policy, (4) the factors that affect the performance of the agricultural sector from the aspect GDP is labor, direct expenditure and GDP lag; from the aspect of labor is the total labor force, investment, land area, direct expenditure, as well as the lag of labor; from the aspect of investment is influenced by GDP per capita, land area, interest rates and investment lag; as well as from the aspect of poor people, are affected by population, investments, direct expenditure and poverty lag, (5). Fiscal policy impact on the agricultural sector GDP increase, a decrease in the number of poor, declining agricultural laborers, and a decrease in the amount of investment in the agricultural sector.Keywords: Fiscal policy, the performance of the agricultural sector, the simultaneous equations

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Lack of Credit in Albania; Who is to “Blame” Analyzing the Demand

European Journal of Economics and Business Studies ◽

10.26417/ejes.v3i1.p122-132 ◽

2015 ◽

Vol 3 (1) ◽

pp. 122

Author(s):

Eugen Musta ◽

Elvin Meka

Keyword(s):

Interest Rates ◽

Small Sample ◽

Economic Situation ◽

Demand Side ◽

Working Capital ◽

Global Crisis ◽

High Interest ◽

Future Perceptions ◽

Economic Slowdown ◽

To Come

The last global crisis had it influence on Albanian economy as well. As the economy is still struggling to recover from the slowdown, a special attention is dedicated to lending which will in turn help investments pick up. Banks in Albania are currently flooding in excess deposits, but meanwhile the lending has hit its lowest score. What is refraining banks from lending? Is it really them to blame or maybe the demand is also part of the problem? Are businesses suffering from lack of funds to finance their activity or are they hesitating to invest and are waiting for better times to come along? The purpose of this study is to look into these questions and find the reasons behind them. This paper is focused on the demand side, analyzing some of the most important indicators influencing the demand for credit like enterprises growth, profits, planned investments, working capital needs, liquidity, etc. In order to get better understanding on the behavior of these variables the enterprises are divided in four groups by size criteria. The analysis is covering data for five-year timeframe, which is corresponding with the start of the economic slowdown. To help getting a prospect of the present and the future perceptions of the economic situation, a survey was conducted on a small sample of enterprises. This study comes to the conclusion that the demand for credit is growing, but what’s keeping businesses from applying for it, is mainly because of high interest rates and cost of credit, the study ends with some recommendations toward the solution.

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Administering Money: Coinage, Debt Crises, and the Future of Fiscal Policy

SSRN Electronic Journal ◽

10.2139/ssrn.3536440 ◽

2020 ◽

Author(s):

Rohan Grey

Keyword(s):

Fiscal Policy ◽

The Future ◽

Debt Crises

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Self-fulfilling debt crises, fiscal policy and investment

Journal of International Economics ◽

10.1016/j.jinteco.2021.103475 ◽

2021 ◽

pp. 103475

Author(s):

Carlo Galli

Keyword(s):

Fiscal Policy ◽

Debt Crises

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Fiscal Policy and Interest Rates: The Role of Sovereign Default Risk

NBER International Seminar on Macroeconomics ◽

10.1086/658302 ◽

2010 ◽

Vol 7 (1) ◽

pp. 7-30 ◽

Cited By ~ 15

Author(s):

Thomas Laubach

Keyword(s):

Fiscal Policy ◽

Interest Rates ◽

Default Risk ◽

Sovereign Default ◽

Sovereign Default Risk

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The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Humanomics ◽

10.1108/h-02-2017-0033 ◽

2017 ◽

Vol 33 (2) ◽

pp. 189-210 ◽

Cited By ~ 2

Author(s):

Issa Salim Moh’d ◽

Mustafa Omar Mohammed ◽

Buerhan Saiti

Keyword(s):

Supply Chain ◽

Interest Rates ◽

Financial Models ◽

Agricultural Sector ◽

Chain Model ◽

Content Type ◽

High Interest ◽

Supply Chain Model ◽

The Government ◽

Clove Industry

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

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