Debt Buildup and Currency Vulnerability: Evidence from Global Markets
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This paper examines how debt buildup is related to currency depreciation pressure. It highlights the importance of a debt surveillance framework that monitors both public and private debt buildup, especially in emerging markets.
The study analyzes a panel dataset of 59 advanced and emerging markets. It finds that both private and public debt exacerbate currency vulnerability, though the evidence of a significant effect on currency depreciation pressure is more robust and consistent for private debt. The authors also find that excessive private debt buildup can be particularly harmful in emerging markets.
Contents
- The Debt Buildup in Emerging Markets in the Aftermath of the Global Financial Crisis
- Debt, Recession, and Financial Stability: A Literature Review
- Empirical Methodology and Data
- Debt Buildup and Currency Vulnerability: The Empirical Evidence
- Conclusion and Policy Implications
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Published Version
Park, Donghyun, Arief Ramayandi, and Shu Tian. 2022. "Debt Buildup and Currency Vulnerability: Evidence from Global Markets." Emerging Markets Finance and Trade 58 (7): 2017–35. https://doi.org/10.1080/1540496X.2021.1949982.