ABSTRACT
The phenomenon of periphery indebtedness takes place in the broader context of world-system structures and dynamics. The concept of the global debt cycle refers to the cyclical aspects of periphery indebtedness. A debt cycle is conceptualized as a structural cycle. It consists of three consecutive phases. The first phase is characterized by the expansion of international loans: core capital shifts from predominantly domestic to foreign investment, and peripheral countries are increasingly raising loans from abroad. The accumulation of large stocks of external debt results in rising debt-service obligations for debtor countries which, in the second phase of a debt cycle, eventually lead to the outbreak of a payment crisis. The subsequent third structural phase of a debt cycle is characterized by attempts to manage debt crisis through the negotiation of debt-settlement agreements between debtor countries and their creditors. The course of global debt cycles can be linked to the movement of Kondratieff growth cycles.
