The global debt overhang

A new IMF report illustrates that a large share of both advanced and emerging economies struggle with private debt overhangs. Excessive debt is a...

The world’s negative term premium

The term premium on the “world government bond yield” has turned decisively negative, according to BIS research. Investors have since 2014 accepted a long-term...

The rise of EM fiscal risks

The latest IMF Fiscal Monitor quantifies the significant deterioration in emerging market government finances. The average deficit-to-GDP ratio in EM is expected to reach 4.7%...

What we can learn from the “fiscal theory of inflation”

Fiscal policy is as important as monetary policy for inflation dynamics. Government debt has features similar to money and affects private wealth and prices....

A mini briefing on global public finance trends

According to IMF estimates the structural government deficit in the developed world has returned to its pre-crisis level. This reflects cumulative fiscal tightening of...

When is public debt a problem for growth?

A new empirical analysis quantifies the (historic) link between public debt and economic growth. Critical thresholds depend on country features, such as access to financing. Average thresholds...

China’s housing boom: numbers and risks

The surge in housing prices in metropolitan China is a systemic concern. A new paper estimates that price growth has been 8-13% per year...

Key global fiscal numbers and trends

The latest IMF fiscal monitor underscores three key fiscal trends. First, deficits in the developed world keep narrowing, thanks to past fiscal tightening and...

The global debt problem(s)

A new McKinsey report estimates that total debt of households, corporates, and governments has expanded 40% since 2007, reaching a total of 286% of...

Updated summary: Government finances and systemic risk

With public debt ratios at their highest levels in two centuries, financial repression has become inevitable, representing the single viable alternative to default. Moreover,...

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Signaling systemic risk

Systemic financial crises arise when vulnerable financial systems meet adverse shocks. A systemic risk indicator tracks the vulnerability rather than the shocks (which are...

How to estimate risk in extreme market situations

Estimating portfolio risk in extreme situations means answering two questions: First, has the market entered an extreme state? Second, how are returns likely to...

The dollar as barometer for credit market risk

The external value of the USD has become a key factor of U.S. and global credit conditions. This reflects the surge in global USD-denominated...

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