The Conceptual Roots of the Global South’s Debt Crisis
Modern Monetary Theory provides a useful lens through which to view the mounting sovereign-debt crisis in the developing world. It sheds light on why low- and middle-income countries borrow in foreign currencies, while also suggesting that rich countries could provide significant relief if they so desired.
DAKAR – The widening debt crisis in the Global South largely emanates from a flawed multilateral system. But it also reflects the inadequacies of the dominant analytical and policy frameworks – specifically, their assumptions about the nature of money, the economic possibilities available to currency-issuing governments, and the underlying causes of developing countries’ external indebtedness.