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Low Growth Causes High Debt

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Pick a country, any country, at any point in time, with a high debt-to-GDP ratio.  That ratio will be strongly correlated with low GDP growth in the last three years, not the next:

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That is from Arindrajit Dube, and there is more at the link.  It appears that low growth causes high debt, moreso than the other way around.

Update:  Everybody and their mother has been sharing this graph.  It is apparently important.  There are also plenty of interesting nuggets at those links.


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