High debt raises ‘macro-financial’ risks in Americas – BIS study
Bulletin says interest costs can result in risk premia feeding into inflation expectations
Elevated debt levels and a growing interest rate burden materially heighten “macro-financial risks” in the Americas, according to economists from the Bank for International Settlements.
In a bulletin published on August 19, Eduardo Amaral, Rafael Guerra, Alejandrina Salcedo, Pablo Tomasini and Christian Upper write that high public debt and rising interest costs amplify the “sensitivity of sovereign risk premia to fiscal deficits and, in turn, increase the impact of risk premia changes on
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