2 ms·
I'm wondering how to think about debt load in China. If asset prices are too high, they will go down. When a debt defaults, someone doesn't have as much money
by skybrian 2y ago
I'm wondering how to think about debt load in China.
If asset prices are too high, they will go down. When a debt defaults, someone doesn't have as much money as they thought they had. This is deflationary.
Meanwhile, the government can print money or raise taxes if they need to.
What are their real (rather than financial) constraints?
- fancl20 2y agoIf you borrow in your own currency there's no real constraints. The trade-off is fiscal deficit = printing money and may cause inflation. Then higher interest rates will put pressure on economic growth.