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High Public Debt Levels Depress Economic Growth

Created on February 19, 2013

High Public Debt Levels Depress Economic Growth

CHART 2

PERCENTAGE OF GDP

An analysis of economic data for 22 countries over 110 years indicates that higher levels of debt result in lower levels of economic growth.

Public Debt at 120% GDP

Public Debt at 90% GDP

No Public Debt Overhang

Source: Carmen M. Reinhart, Vincent R. Reinhart, and Kenneth S. Rogoff, “Public Debt Overhangs: Advanced-Economy Episodes Since 1800,"Journal of Economic Perspectives, Vol. 26, No. 3 (Summer 2012), pp. 69–86, http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.26.3.69 (accessed December 27, 2012).

B 2768

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