The impact of high public debt on economic growth

Academic work suggests that public debt above 90% of GDP is a drag for GDP growth. This would apply to the developed world today....

Tracking the history of sovereign defaults

Bank of Canada has assembled a new broad database on global public debt default. It shows that after sovereign delinquency had exceeded 5% of...

What we can learn from the “fiscal theory of inflation”

Fiscal policy is as important as monetary policy for inflation dynamics. Government debt has features similar to money and affects private wealth and prices....

Public finance risk

Fiscal expansion was the logical response to the 2020 health and economic crisis. Alas, public deficit and debt ratios had already been historically high...

China’s housing boom: numbers and risks

The surge in housing prices in metropolitan China is a systemic concern. A new paper estimates that price growth has been 8-13% per year...

When does shadow banking become a problem?

A new ECB paper explains key risk factors of shadow banking. First, if unregulated finance outgrows market size, tightening liquidity can escalate into runs...

The global debt overhang

A new IMF report illustrates that a large share of both advanced and emerging economies struggle with private debt overhangs. Excessive debt is a...

The systemic risk of highly indebted governments

The public debt ratio of the developed world has remained stuck at a 200-year record high, even with a mature global expansion and negative...

The global debt problem(s)

A new McKinsey report estimates that total debt of households, corporates, and governments has expanded 40% since 2007, reaching a total of 286% of...

The rise of counter-cyclical fiscal policy

A new IMF paper illustrates the changed realities of public macro policy. In times of negative shocks at the zero bound for interest rates,...

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