Home  Journals  Financial Analytics: Science and Experience  14(248) - 2015 April

National debt in global economy: new levels of risk

Available online: 10 April 2015

Subject Heading: Economic policy

JEL Classification: 

Pages: 59-68

Importance The crisis of 2008 resulted in a drastic growth in national debt of some developed economies. It therefore caused a rise in global debt burden and a threat to global economic development. In this respect, it is necessary to have a clear understanding of the current trends and situation in relation to national debts of the above countries and global economy as a whole.
     Objectives The research aims at analyzing trends and a growth pace of national debts in developed and developing countries, and global economy as a whole for the recent years, identifying specific countries or their alliances that have the highest level of national debt, evaluating debt risks and possibilities to manage them.
     Methods Based on data of international economic organizations and quantitative and statistical analysis, I analyze the growth pace and current indicators of sovereign debt in some countries and world's regions.
     Results The article illustrates the dynamics of national debt and current composition of debt burden in global economy. Considering a smooth and stable growth for the recent 15 years, I find out that the trend becomes more typical of developed countries, rather than developing ones, and it gets concentrated in developed countries.
     Conclusions and Relevance I conclude that the global economy has three debt-laden 'poles', i.e. the USA, Japan and the EU. The USA and Japan demonstrate certain stability margin and have tools to manage and regulate their national debt; meanwhile the EU countries seem to suffer from internal constraints. It creates risks for the EU and global economy as a whole.

Keywords: national debt, developing economy, transition economy, developed economies, debt burden

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ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

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