There's no emerging market debt threat

It's good to be warned and to be prudent in managing debt. But are EMDEs really going on a debt binge that could hurt the global economy?

The World Bank warns us of a large wave of debt that has been building up since 2010. (Global Economic Prospects, 2020). It’s driven by a rise in debt in emerging market and developing economies (EMDEs). The build-up has been faster and broader than in the three waves of debt in EMDEs that happened before in the past 50 years. 

Every one of the earlier three waves ended in a financial crisis. The report spells out the impact of these crises. It suggests ways in which EMDEs might reduce the probability of a debt-induced crisis and its impact. 

It’s good