Wednesday, January 17, 2018

The Debt Age

Carmen Reinhart

At what point does a country’s debt burden affect its ability to grow? Under which conditions should sovereign debt relief be applied? Does a deliberate policy of accumulating large foreign reserves protect countries from external shocks or merely crowd out private investment? What awaits countries like Cuba and Iran as they reintegrate with the global economy?

Debt, not growth, has been the hottest economic topic since the 2008 global financial crisis hit. Across the European Union, and from giant economies like China and Japan to tiny Puerto Rico, massive debt has become a central concern of economists and policymakers, as it has undermined countries’ ability to sustain demand and GDP growth.

Few professional economists have examined the economic impact of debt as painstakingly as Carmen Reinhart, Professor of the International Financial System at Harvard University’s Kennedy School of Government. Her book, This Time is Different (co-authored with Kenneth Rogoff) has been at the heart of the global debate about debt since its publication in 2009.

Reinhart’s career has spanned the private sector, academia, and international organizations. A former deputy director of research at the IMF and former Chief Economist at the investment bank Bear Stearns, she knows well how financial policies are shaped – or misshaped – and how they are likely to influence an economy’s prospects.

In the aftermath of the financial crisis, governments and financial institutions have turned to Carmen Reinhart for insights into how to stimulate growth in the shadow of an unprecedented debt overhang. In The Debt Age, written exclusively for Project Syndicate, she shares these insights with readers worldwide.

In an age when debt is constraining growth worldwide, don’t your readers need to be acquainted with fresh approaches?

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