New debt contracts could save countries from financial ruin after disasters.
The best way for countries to borrow money is by using flexible debt contracts that adjust based on different situations, like natural disasters or pandemics. These contracts help governments manage their debt and keep getting financial support even during tough times. By using these special debt instruments, countries can avoid defaulting on their loans and keep their economies stable. This approach also helps countries invest in important projects and grow their economies in the long run.