If the interest rate, including the risk premium, is lower than potential growth, very serious disruptions occur

When the long-term interest rate including the risk premium is lower than nominal potential growth, very worrying characteristics of the economies emerge: It is rational to borrow as much as possible to consume in the short term; It becomes impossible to calculate the fundamental value of asset prices (the discounted sum of the future income provided by holding the asset), and any asset price, however high, is acceptable. We look at, in the United States and the euro zone, which debts (government, household, corporate) have this characteristic: the interest rate, including risk premium, is lower than (nominal) potential growth. This applies to government, household and corporate debts, except for High Yield companies .