International indebtedness, interest rates and inflation

Authors

  • P. MANES

DOI:

https://doi.org/10.13133/2037-3643/10745

Keywords:

International indebtedness, interest rates, inflation

Abstract

The work establishes that international indebtedness, as well as domestic government and corporate indebtedness, tend to degenerate, and then become self-feeding, when interests cannot be paid out of the return on the capital employed but are paid out of new borrowings. Furthermore, such a degeneration can be the farther extended, the greater the bank intermediation in medium and long term lending and the more fully the banking system is integrated. The author concludes that the outcome of this process must be inflation, which cannot be overcome through high interest rates since they feed higher indebtedness.

 

JEL: F34, E31, E43

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Published

2013-10-11

How to Cite

MANES, P. (2013). International indebtedness, interest rates and inflation. PSL Quarterly Review, 35(140). https://doi.org/10.13133/2037-3643/10745

Issue

Vol. 35 No. 140 (1982)

Section

Editorial

License

 
 
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