Has the rise in OECD countries’ debt ratios increasingly constrained monetary policy?

T he total debt ratio of OECD countries has been on an upward trend since the early 1980s. But this has not met with a trend decline in borrower solvency: there have been crises, following which borrower solvency has been restored. We seek to determine whether this is due to central bank policy: they have conducted a policy of ever-lower interest rates as debt ratios have risen . This has prevented a loss of borrower solvency, but could trigger a vicious circle where this policy enables debt ratios to continue to mount.