In Praise of Debt: Why Greece’s Mistakes Shouldn’t Hurt Emerging Borrowers

This paper originally appeared on Bloomberg Businessweek on August 31, 2011.

The Greece imbroglio could have wider and more damaging reverberations across Europe and—even worse—throughout the developing world. The current engines of the global economy—the emerging and frontier markets—also require access to risk capital to keep the growth machine going. Politicians and economists alike hold up Greece as a cautionary tale to other countries, including the United States, about the dangers of debt. But it could really hurt billions of people in developing countries if the Greek mess gives people the wrong idea—yet again—about borrowing for development.