Debt Crisis

Economics research papers can examine the debt crisis and dissect the problem from several standpoints. Have Paper Masters' economics writers custom write you a research paper that explains the debt crisis and the complexities that drive the growing problem in the United States and various other nations around the world.

During the last 20-years, the debt crisis emerged as Lesser Developed Countries (LDC's) found themselves unable to repay the loans that had been made to them during the 1970's and 1980's. With a rise in world interest rates, global recession and low commodity prices, the size of the debts incurred by LDC's started to grow very fast and many of the LDC's fell behind in their payments.

The Debt Crisis Deficit

The debt crisis has lead to the current U.S. account deficit of nearly $450 billion dollars. One of the ways that LDC's have attempted to repay their debts is through increasing exports while reducing imports. The impact on the U.S. has been an increase in the trade deficit. Unable to export equally to the need to import, the trade deficit has increased during the last 20 years leading to the current account deficit.

The Emergence of the Debt Crisis

Lessons to be learned from the emergence of the debt crisis are primarily those associated with recognizing that short-term benefits that lead to massive outflows will be outweighed in the long run. As explained by debt crisis research papers, such actions result in the following:

• The possibility of domestic evasion
• Capital flight
• Discouraging investment by foreigners

Providing capital inflow without considering the long-term possibilities of the international monetary system can lead to massive debt for all associated parties.