A debt overhang is a weakening of demand - and therefore of growth - caused by excessive debt. A high debt ratio can prompt governments and private economic agents to save more and spend less, leading to a weakening of demand. By comparing total debt ratios and subsequent growth in OECD countries, we see that there seems to be a debt overhang, but to a limited - or even a very limited - extent in OECD countries.
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Natixis
Natixis
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