Debtor Nation - Explained
What is a Debtor Nation?
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is a Debtor Nation?
A nation who owes more to the other countries than its total investments in foreign lands is called a debtor nation. In other words, it is a country with a cumulative balance of payment deficit. A debtor nation invests fewer resources worldwide than the other countries cumulatively invest in it.
Back to:ECONOMIC ANALYSIS & MONETARY POLICY
How to Identify a Debtor Nation?
An individual or an entity who owes money or any other benefits to some other entity or individual is called a debtor or borrower. A nation who owes to other nations is called debtor nation. After calculating the total investments made worldwide, a debtor nations net investment stands negative. The USA is considered to be a debtor nation, as it owes more to the other countries than other nations owes to it. Among other debtor countries, there are Greece, Portugal, Brazil, India, and others. The total money and exports sent out to the other countries by a debtor nation are lower than the money coming into the country, so it faces trade deficit. When demand in a country is higher than the production necessary to meet that demand, the country imports goods from foreign countries to meet that demand. The result is a trade deficit. There are benefits and detriments to this. Importing foreign goods and services allows the people of the country to have more choices available to them. Also, importing increases the foreign competition which often leads to a decreased price of consumer goods in the country. The negative is that there is generally a loss of production jobs in the country purchasing the cheaper foreign goods. This can lower economic demand as these workers have lose a source of recurring income.
Related Topics
- What is Government Spending?
- Autonomous Spending
- Autonomous Consumption
- Fiscal Policy
- Expansionary Fiscal Policy
- Contractionary Fiscal Policy
- Progressive vs Regressive Tax
- Marginal Tax Rates
- Proportional Tax
- Trickle Down Theory
- Discretionary Fiscal Policy
- Automatic Stabilizers
- Effects of Discretionary Policy (Interest Rates & Lags)
- Crowding Out Effect
- National Debt
- Government Borrowing
- Golden Rule
- Ricardian Equivalence
- Balanced Budget - Deficit and Surplus
- National Debt
- Standardized Employment Budget
- Deficit Hawk
- Austerity
- Twin Deficits
- Fiscal Policy and the Aggregate Supply and Demand Curve
- Stabilization Policy
- Robin Hood Effect
- Ricardo Barro Effect
- Automatic Stabilizers
- Standardized Employment Budget
- How Does Fiscal Policy Affect Interest Rates?
- Crowding Out
- Types of Lag in Fiscal Policy
- Temporary and Permanent Fiscal Policy
- Limitations of Fiscal Policy?
- How Politics Affects Discretionary Fiscal Policy
- Government Borrowing
- National Savings and Investment Identity
- Debtor Nation
- Fiscal Policy Affects Trade Balances
- Twin Deficits
- Exchange Rates Affect Budget and Trade Deficits
- What are the risks of chronic large deficits in the United States?
- How Fiscal Policy Can Affect Trade Imbalances
- Government Borrowing Affect Private Savings
- Ricardian Equivalence
- Fiscal Policy Affects Investment and Economic Growth
- Crowding Out of Physical Capital Investment?
- How Does Government Borrowing Affect Interest Rates in Financial Markets?
- Government Investment in Physical Capital
- Public Investment in Human Capital
- Fiscal Policy Can Affect Technology Development
- Economic Cycle or Business Cycle
- Business Cycle Indicator
- Peak and Trough
- Recession and Depression
- Hard Landing vs Soft Landing
- Economic Bubble
- Boom and Bust Cycle
- Great Depression
- Baby Boomer Age Wave Theory
- Skyscrapper Effect (Economics)
- V-Shaped Recovery
- W-Shaped Recovery
- U-Shaped Recovery
- Kondratieff Wave Cycle
- Contagion
- Feedback Rule Policy
- American Customer Satisfaction Index
- CNN Effect
- Bureau of Economic Analysis
- Business Starts Index
- American Recover and Reinvestment Act
- Abenomics
- Emergency Economic Stabilization Act of 2008
- Commodity Credit Corporation
- Humphrey Hawkins Act
- Stagnation
- Neoclassical Growth Theory
- Exogenous Growth Theory
- Endogenous Growth Theory
- New Growth Theory - Explained
- Classical Growth Theory - Explained
- Real Economic Growth Rate - Explained
- Plutonomy