Debt moves the world

AFTER the IMF lowered its global growth forecast for this year and next, it is worth reflecting that, despite all the efforts of the central banks, this is a very wimpy recovery. There are a number of potential candidates for the problem; poor fiscal policy (in the form of austerity), the effect of demography, or Robert Gordon’s ideas about the lingering impact of innovation. But the debt burden taken on by developed economies in the run up to 2007 and 2008 is surely the most significant factor.

 

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