Debt, deleveraging, and the liquidity trap

Paul Krugman 18 November 2010

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If there is a single word that appears most frequently in discussions of the economic problems now afflicting both the US and Europe, that word is surely “debt.” Between 2000 and 2008, household debt rose from 96% of US personal income to 128%; meanwhile, in Britain it rose from 105% to 160%, and in Spain from 69% to 130%. Sharply rising debt, it’s widely argued, set the stage for the crisis, and the overhang of debt continues to act as a drag on recovery.

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Topics:  Macroeconomic policy

Tags:  global crisis, debt, fiscal deficits

A new watchdog would guard us from debt

Tim Besley, Andrew Scott 25 February 2010

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A legacy of the financial crisis and subsequent government intervention has been large fiscal deficits and soaring public debt. The UK’s position is worse than most, as it entered the recession with a significant structural deficit, but Portugal, Ireland, Greece, and Spain are also facing growing concerns over their government debt.

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Topics:  Global crisis Macroeconomic policy

Tags:  public debt, fiscal deficits