ABSTRACT

This chapter shows that the global debt cycles are linked to other cyclical processes taking place within the world-economy. It argues that debt cycles are related to the course of both Kondratieff growth cycles lasting 45-60 years and Kuznets cycles with 18-25 years' duration. The empirical material demonstrates that from 1820 to 1945 more than 130 defaults on external public debt occurred among economically less advanced countries. In a statistical sense, debt-servicing incapacity and default were the normal state of financial affairs in several peripheral debtor countries during the nineteenth and twentieth centuries. The share of blocked credits amounted to 22 percent and 23 percent, respectively, in the late 1820s and mid-1870s, and rose to 27 percent in the early 1930s. Estimates for the present crisis suggest a similar or even higher proportion of frozen assets. The chapter also presents an overview of the key concepts discussed in this book.