Broader view of debt sustainability is needed – NBER paper
Government debt is not necessarily at historical highs, authors say
Economists may be too hasty in concluding that government debt is unsustainable if they are focusing solely on debt-to-GDP ratios, a new study finds.
The authors, Jonathan Berk and Jules van Binsbergen, say the debt-to-GDP ratio has become the “defining metric of government indebtedness”, despite there being “little formal justification” for using the ratio on its own.
In a working paper, published this week by the US National Bureau of Economic Research, the economists compare debt-to-GDP ratios
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