Debt and currency value during COVID-19 in the Global South |
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Authors: | Behrooz Gharleghi |
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Institution: | Arden University, Berlin, Germany |
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Abstract: | The aim of this article is to examine debt and currency vulnerability during economic turbulence in the Global South. A panel data analysis is performed on a panel of 25 economies consisting of nine developed and 16 developing countries with a focus on public and private debt. The empirical findings reveal that only public debt build-up has an adverse effect on currency value. There is no evidence of a significant impact of recession periods on currency value for both private and public debt estimations. I also found that private debt build-up can be more harmful than public debt in developing countries. In addition, both public and private debt have increased as percentages of GDP during COVID-19. |
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Keywords: | currency stress exchange rate private debt public debt |
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