High public debt will choke long-term growth: ECB
An European Central bank paper, published on Monday, documents a highly significant non-linear relationship between national debt to GDP ratios and per capita output growth rates, using a sample of 12 European Union countries.
The paper's authors demonstrate that national debt of between 90% and 100% of GDP can create slower long-term growth rates. For some countries, they show, growth could be slowed down by a debt to GDP ratio as low as 70%.
Public debt affects the growth rate through private
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