If one country defaults on its loans, its a big problem for its citizens. If a dozen countries default, its a big problem for the world.
In the 1980s, defaults in Latin America led to hyperinflation, riots and political instability in Argentina, Brazil and Peru. The world appears to be on the verge of yet another debt crisis and leaders in the United States and elsewhere have a chance to come together to support the measures that would avert it. They should dust off the tool kit that helped end the Latin American debt crisis, especially the measures that convinced creditors to share the pain and accept less than what they were owed.
Todays crisis has several immediate causes: Lenders, again, ignored prudence, so some countries had been bo…
Read the full article at: https://www.nytimes.com/2023/04/17/opinion/imf-debt-crisis-china.html