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Marginal GDP of Debt

Marginal GDP of Debt

Parent term
Economic Growth

The Marginal GDP of debt is an indication of how much GDP growth a country will see for each added dollar of debt

  • As debt levels as a % of GDP rise, this value tends to fall
    • Academic studies suggest that countries should lose 1/4 - 1/3 of their growth rate at high debt levels
      • Us lost 45% growth of periods of 1790-1999 and 2000 - 2017
    • Fell rapidly from 2007 to 2017 as the world took on more debt
      • 14% drop in advanced economies
      • 37% drop in merging markets

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