Borrowing
in sentence
1116 examples of Borrowing in a sentence
At the macro level, a less credit-constrained economy (with a large mass of effective borrowers) could then experience a fall in the savings rate as
borrowing
rose.
This asymmetry in savings patterns might thus reflect the simple fact that credit-constrained economies are less sensitive to drops in the cost of
borrowing
relative to less constrained economies.
For young Americans (those under 25), the
borrowing
rate rose by ten percentage pointsmore than the
borrowing
rate of young Chinese, while the savings rate of the Chinese working-age population (ages 35-54) rose by about 17 percentage points more than the savings rate of their American counterparts.
Another implication of this view is that the steep rise in savings in China is largely driven by a rise in the savings rate of middle-aged Chinese (rather than a fall in the
borrowing
rate of the young).
Conversely, the fall in savings in the US is largely due to higher
borrowing
by the young (rather than a fall in middle-aged Americans’ savings rate).
These favorable effects are directly relevant to balancing the primary adverse effects usually associated with a fiscal deficit: that government
borrowing
crowds out private capital formation; that higher interest payments generally require higher taxes or reductions in spending on defense and nondefense programs; that a budget deficit implies an unwanted increase in aggregate demand when the economy is at full employment; and that a higher debt ratio leaves less capacity for increased emergency government spending.
Although the $1.5 trillion of government
borrowing
caused by the tax bill during the next decade could crowd out an equal amount of private borrowing, the capital stock will grow by an even larger amount.
Even with increased government borrowing, the proposed tax reform can therefore still raise the corporate capital stock by some $5 trillion over the next decade.
The problem is that allowing public investment to be financed by
borrowing
would lead to continuing disputes between the Commission and individual member states, because it relies excessively on that blurred distinction.
Today, unemployment in the eurozone’s south is three times higher than in the north; the debt/GDP ratio is almost 50 percentage points higher; and
borrowing
costs for southern European companies are 250 basis points higher than for northern companies.
Borrowing
strikes them as a way of taxing by stealth.
The higher the national debt, according to this view, the greater the risk of government default – and therefore the higher the cost of fresh government
borrowing.
This in turn will raise the cost of new private-sector
borrowing.
And as the record bears out, continuous increases in both countries’ national debt since the crash have been accompanied by a fall in the cost of government
borrowing
to near zero.
This is crystal clear if the government simply raises the money it needs for its spending through taxes rather than
borrowing
it.
Furthermore, the idea that additional government spending, whether financed by taxation or borrowing, is bound to reduce private consumption by the same amount assumes that no flow of additional income results from the extra government spending – in other words, that the economy is already at full capacity.
The slowdown in Chinese economic growth this year has been due almost entirely to deliberate decisions to deleverage the banking system, cut local governments’ borrowing, reduce over-investment in infrastructure, and curb booming house prices by tightening monetary policy.
(It hardly needs stating that
borrowing
money from the IMF is not a default.)
Russia’s worsening credit rating and the tougher
borrowing
terms in the international market are forcing Russia to compete harder for capital.
To restore confidence and buy time for governments to reduce borrowing, ECB President Mario Draghi pledged to do “whatever it takes” to preserve the eurozone – and that meant potentially unlimited purchases of distressed eurozone members’ government bonds.
The real reason to worry is that India has lost international competitiveness and has been buying time by
borrowing
from fickle lenders.
India has been left to finance its external deficit increasingly through short-term borrowing, the most capricious form of international capital.
To avert a disorderly fall, short-term macroeconomic management requires officially engineered depreciation through administrative methods and restraints on external
borrowing.
Borrowing
countries such as Argentina or the Ottoman Empire regularly defaulted.
The defaults of that time were not confined to one country, but swept across the globe in a contagious panic that destroyed financial systems in lending as well as
borrowing
countries.
Indeed, the economy is growing briskly, unemployment is below the eurozone average, and the government’s
borrowing
cost is one percentage point lower than the US Treasury’s.
Meanwhile financial fragmentation within the eurozone continues;Spain, and to a lesser extent Italy, suffers a seemingly irresistible rise in
borrowing
costs; and political strains grow more visible.
The government’s proposed budget promises to increase
borrowing
to finance a 2.4%-of-GDP deficit in 2019 and the following two years.
If Italy’s
borrowing
costs remain stubbornly high, the only solution is to try harder.
The country must drastically tighten its domestic monetary policy, curtail foreign borrowing, and prepare for the likelihood of a full-blown economic recession, during which time domestic saving will slowly have to be rebuilt.
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