Finance Matters

Finance Matters is the MIT Sloan Finance Group’s platform for sharing the latest on Finance faculty research, perspectives on financial industry news, MIT Sloan finance-related events, and will feature guest posts from our faculty, students, alumni, and affiliates.

China’s Growing Local Government Debt Burden

Posted by Deborah Lucas on January 27, 2016

High rates of debt growth by local governments are a cause for concern in any country. In China, where recent turmoil in the equity and foreign-exchange markets has put a spotlight on that country’s economy and growth prospects, increasing levels of borrowing by provincial and other lower levels of government has resulted in local indebtedness rising nearly fourfold since 2008, reaching about 40 percent of GDP. Debt growth of that magnitude raises concerns about fiscal sustainability, debt affordability, transparency and…
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Who pays when Greece defaults on the IMF?

Posted by Deborah Lucas on August 10, 2015

Greece recently failed to pay $1.7 billion due to the IMF, thereby becoming the first developed country to default on an IMF loan. That missed payment represents only a portion of the approximately $23 billion in IMF credit outstanding to Greece, suggesting the ultimate losses to the Fund could be much bigger. The good news is that the potential losses are small in comparison to the IMF’s $350 billion in pledged resources from its members. Barring massive contagion, there is…
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How much do natural disasters really cost corporate America?

Posted by Jean-Noel Barrot on June 2, 2015

See the original article posted on Fortune here>> Sales growth of supplier firms directly hit by a natural disaster drops by around five percentage points, according to a study. As spring begins in New England after record-setting snowfall this winter, the economic consequences of natural disaster are a common topic of discussion. We know it will have a big impact on New England, but will it affect other parts of the country? If so, who will be affected and how…
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Opinions expressed in this blog are that of individuals and do not reflect the general opinion of Massachusetts Institute of Technology and MIT Sloan.