Debtor nations face ‘long-term pain’, BdF research finds

Long-term debt issued when rates were higher will create burden, Banque de France paper says


Debt issued by France and the US under high inflation and interest rates means the countries will go from “short-term gain into long-term pain”, new research argues. 

Higher inflation and rates from 2021 to 2022 had a positive short-term impact on the countries’ net international investment position (NIIP). Rising inflation cut the value of their external liabilities, note Bruno Cabrillac, Valérie Chauvin and Julia Schmidt, in a Banque de France working paper. 

However, events since 2021 will

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