At some point the exchange rate falls, leaving the financial position of borrowers under strain, as both the principal value and the debt servicing cost of the loan are higher in terms of the local currency in which the borrowers earn their income.
At this year’s Economics Conference, we will discuss in more detail whether these pessimistic outlooks are justified – or whether “this interpretation is widely mistaken,” as Keynes concluded almost a century ago. 1 Ladies and gentlemen, Economic growth is a spectacular phenomenon.