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Is there such a thing as "good debt"? And how could something good cause so many issues? On top of this is there any way that we could just run an economy without debt and would we be better off for doing so. Well, it turns out we probably can, and in fact, there are many economies around the world today that are developing rapidly while going without this system that we just assume is a given.
If we can critically explore these questions it will offer insight into how our modern financial system works, and why it means that despite our best efforts we are almost destined to go into a recession once every 10 years or so.
📚 Want to learn more about how a country (should) deal with debt? We recommend reading "Big Debt Crises", by Ray Dalio 👉 https://amzn.to/3cFtuMY
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Sources & Citations -
Harris, M. and Raviv, A., 1990. Capital structure and the informational role of debt. The Journal of Finance
Chava, S. and Roberts, M.R., 2008. How does financing impact investment? The role of debt covenants. The journal of finance
Holmstrom, B., 2015. Understanding the role of debt in the financial system.
Frost, C.A. and Bernard, V.L., 1989. The role of debt covenants in assessing the economic consequences of limiting capitalization of exploration costs. Accounting Review
Ariff, M., 1988. lsIamic banking. Asian‐Pacific Economic Literature
Graham Stephan's vid - youtube.com/watch?v=Uw3EhsmLe08
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