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Private Debt is the Problem!

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  • Savvides, Savvakis C.

Abstract

Cyprus suffers from a developing acute case of Balance Sheet Recession. This means that because of the excessive and quite unprecedented levels of private debt (3 to 4 times the size of the country’s GDP) weighing on households and corporations, it is practically impossible for the country to overcome the recessionary effects of the austerity conditions that were imposed since the bail-in in 2013 and which still constitute the core of the Government policy. The article concludes that therefore the government should stand ready to have in place the institutions and provide for such fiscal measures which will mitigate and cushion the deflationary effects of the coming, but very foreseeable, recession.

Suggested Citation

  • Savvides, Savvakis C., 2017. "Private Debt is the Problem!," MPRA Paper 80627, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80627
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    File URL: https://mpra.ub.uni-muenchen.de/80627/1/MPRA_paper_80627.pdf
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    References listed on IDEAS

    as
    1. Savvakis C. Savvides, 2016. "Overcoming Private Debt: Unblocking and rebuilding the loan burdened real economy in Cyprus," Development Discussion Papers 2016-08, JDI Executive Programs.
    2. Michael Hudson, 2012. "The Road to Debt Deflation, Debt Peonage, and Neofeudalism," Economics Working Paper Archive wp_708, Levy Economics Institute.
    3. Leslie G. Manison & Savvakis C. Savvides, 2017. "Neglect Private Debt at the Economy's Peril?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 18(1), pages 1-17, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Private Debt; Balance Sheet recession; Austerity;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G2 - Financial Economics - - Financial Institutions and Services
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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