The dynamics of debt.

How much can a country, or a government, borrow before its debts grow "unsustainably"?

THE last word on whether debt is growing sustainably or unsustainably rests with financial markets. As long as lenders are willing to lend more at the going rate of interest, mounting debt is sustainable; when they aren't, it isn't.

When economists talk of sustainability, however, they often mean something different. They ask what will happen to debt if borrowing continues at its present rate. If the projected growth in debt flattens out in relation to income, and at a level ...

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Home ARCHIVES: Archive: January 2008	The dynamics of debt. How much can a country, or a government, borrow before its debts grow "unsustainably"? THE last word on whether debt is growing sustainably or unsustainably rests with financial markets. As long as lenders are willing to lend more at the going rate of interest, mounting debt is sustainable; when they aren't, it isn't. When economists talk of sustainability, however, they often mean something different. They ask what will happen to debt if borrowing continues at its present rate. If the projected growth in debt flattens out in relation to income, and at a level ... Previous: 28 January 2008 \| Home
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The dynamics of debt.