"New research suggests the high and rising debt of the U.S., Japan and Europe will stunt economic growth unless countries act quickly to contain it.
A paper presented Friday by three economists at the Bank for International Settlements finds that debt–be it government or corporate–starts to weigh on growth when it rises close to an economy’s annual output, a predicament currently shared by almost all of the world’s largest advanced economies.
Stephen G. Cecchetti, M.S. Mohanty and Fabrizio Zampolli show that public debt begins to hurt once it rises from a range of between 80% to 100% of gross domestic product. The threshold is above 90% of GDP for corporate debt and around 85% of GDP for household debt, though the economists warn the latter is only their best guess..."
at http://blogs.wsj.com/economics/2011/08/27/high-debt-levels-poised-to-stunt-growth/?mod=WSJBlog
A paper presented Friday by three economists at the Bank for International Settlements finds that debt–be it government or corporate–starts to weigh on growth when it rises close to an economy’s annual output, a predicament currently shared by almost all of the world’s largest advanced economies.
Stephen G. Cecchetti, M.S. Mohanty and Fabrizio Zampolli show that public debt begins to hurt once it rises from a range of between 80% to 100% of gross domestic product. The threshold is above 90% of GDP for corporate debt and around 85% of GDP for household debt, though the economists warn the latter is only their best guess..."
at http://blogs.wsj.com/economics/2011/08/27/high-debt-levels-poised-to-stunt-growth/?mod=WSJBlog
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