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Re-thinking debt burden: Going with the Flow?

Vipul Bhatt, Andre R. Neveu

2014/8

JEL Classification codes : E6,E62, E66,

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[ Abstract ]

This paper provides an empirical measure of debt burden based on a flow measure of debt we call “DaaF”. This paper provides an empirical measure of debt burden based on a flow measure of debt we call “DaaF”. We find that although both measures have witnessed substantial growth, especially following the 2008 crisis, the growth in debt-to-GDP ratio is much more substantial. Given the increased scrutiny of the U.S. debt policy, primarily stemming from the narrative surrounding the high and rapidly rising debt-to-GDP ratio, our findings here provide a counterpoint based on a more reasonable measure of the debt burden.