Evaluation of the debt policy of the southern macroregion subjects in modern conditions

The relevance of the topic is due to the fact that debt crises have an extremely negative impact on the national economy, which implies the need for constant attention on the part of the government to issues of public debt management in order to timely, identify possible violations of debt stability. The subject of the research is the debt sustainability of the constituent entities of the South of Russia as the ability of the constituent entities of the federation to timely and fully service the public debt without significant adjustments to the balance of income and expenses. The aim of the research is to assess the debt sustainability of the constituent entities of the South of Russia and develop measures aimed at increasing it in order to prevent the emergence of an imbalance in regional finances and reduce the likelihood of debt crises. An increase in government borrowing rises budget spending on public debt servicing and can provoke an imbalance in the financial system. Diversification of the debt portfolio helps to ensure its balance. The structure of the debt portfolios of the constituent entities of the Federation may include budget loans, government guarantees, government securities, loans from credit institutions and other instruments. The article notes that the debt sustainability of the constituent entities of the Russian Federation directly depends on the decisions made at the federal level and the amount of government spending directed to specific regions. Therefore, it is necessary to maintain such a level of debt sustainability, which will prevent the emergence of an imbalance in regional finances and reduce the likelihood of debt crises. This presupposes the application of uniform recommendations for assessing debt sustainability in all constituent entities of the Russian Federation. The analysis of the volume and structure of the state debt of the constituent entities of the South of Russia, carried out in the article, made it possible to conclude that the debt policy of the macroregion is fragmented: the structure of debt portfolios is heterogeneous; a change in the level of debt burden can be associated with both an increase in tax and non-tax revenues, a decrease in the amount of public debt, and with reverse processes.

Cycles of Catastrophic Debt

This chapter investigates cycles of debt crises, which occur when poor countries cannot make the payments on their loans. There are many stories of how debt crises have produced underdevelopment, but one of the most compelling is that of Egypt in the nineteenth century. Of all the nations in the Middle East, Egypt was the most primed to have an industrial revolution. It invested in bona fide development projects, including railroad building, land drainage, and building the Suez Canal. However, it spent a fortune rebuilding Cairo to make it look European and fought wars with Turkey and the Sudan, while its leaders enjoyed pharaonic lifestyles. By the mid-nineteenth century, Egypt was heavily in debt. A similar process occurred in Latin America when it got itself into serious debt problems in the 1970s. Some of the money went to development projects, some went to antipoverty projects, and some was just siphoned off. Venezuela's elite bought more foreign assets in 1981 than the entire value of the loans that were negotiated that year. When the crunch came, the International Monetary Fund insisted that the Latin American governments shrink their government expenditure in order to pay their debts. This meant that most nations in Latin America reduced their expenditure on public health and hospitals, education, and programs for the poor.

Defining the Area of Knowledge for Financial Literacy: The Influence of Financial Courses on Materialism

Numerous studies have foundthatfinancial literacy may assist in averting irresponsible spending that linked to materialistic values. However, the area of knowledge that delivers financial literacy varies among studies. The study determines whether credit hours of financial courses,namely, economics, finance and accounting, affect materialism. Consequently, three moderator variables namely gender, year of study and financial sponsorship, were added into the analysis. A survey was conducted on 1022 business undergraduates in Universiti Pendidikan Sultan Idris using money attitude scales as a proxy to measure materialism. Findings indicate that there werenodirectcorrelations between credithoursof financial courses cumulatively or individually, with materialism scores. However, when the year of studyvariable,specifically fourth-year students category, wasinserted as a moderating effect, all three financial courses credit hours were found to be negatively correlatedwith materialism score. The findings demonstrate that accounting courses credit hours affect all materialism dimensions. Meanwhile, three and two materialism dimensions negatively correlated with economic and finance courses, respectively. It indicates that final year students materialistic values lessen as particular financial courses credit hours increased. The findings may provide input to financial literacy modules to mitigateyoung-executive debt crises.

Sovereign Debt Restructurings

Sovereign debt crises involve debt restructurings characterized by a mix of face value haircuts and maturity extensions. The prevalence of maturity extensions has been hard to reconcile with economic theory. We develop a model of endogenous debt restructuring that captures key facts of sovereign debt and restructuring episodes. While debt dilution pushes for negative maturity extensions, three factors are important in overcoming the effects of dilution and generating maturity extensions upon restructurings: income recovery after default, credit exclusion after restructuring, and regulatory costs of book value haircuts. We employ dynamic discrete choice methods that allow for smoother decision rules, rendering the problem tractable. (JEL E44, F34, F41, H63)