Working Paper: NBER ID: w2061
Authors: Lawrence H. Summers
Abstract: This paper examines the recent dramatic increase in the ratio of US non-financial debt to GNP. It concludes that it is largely the result of federal budget deficits. There does not appear to have been a major change in traditional patterns of private sector borrowing in recent years. The excessive accumulation of Federal debt probably threatens financial stability more than recent increases in private debt.
Keywords: debt; macroeconomic policy; financial stability
JEL Codes: E62; H63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| federal budget deficits (H68) | accumulation of nonfinancial debt (F65) |
| federal budget deficits (H68) | private sector debt levels (F34) |
| federal budget deficits (H68) | real interest rates (E43) |
| accumulation of federal debt (H63) | financial stability (G28) |
| federal budget deficits (H68) | composition of economic activity (E20) |