When it’s better to be a debtor, Covid-19 and infrastructure stimulus, and more
THE WEEKEND REVIEW
Latest opinion and analysis from OMFIF around the world
17-21 August 2020, Vol.11 Ed.32
When it’s better to be a debtor: A new era of inflation – or deflation – would create financial winners and losers among the world’s major lender and borrower economies. An inflationary macroeconomic environment tends to benefit holders of equities and punish holders of bonds. For most advanced debtor economies, equities take up a higher share of foreign assets than foreign liabilities. This means that an inflationary world economy would help to reduce the NIIPs of debtor economies. A deflationary one would have the opposite effect, writes Chris Papadopoullos. Read more.