The danger of high public debt ratios: Two views

Public debt ratios have risen considerably in OECD countries as a whole and in most of these countries. Two views have emerged in response to this situation: Some think that the high public debt ratios and expansionary fiscal policies are not a problem thanks to the very low level of interest rates; 1 While others believe these high public debt ratios herald a major financial crisis. The analysis must therefore go beyond these assertions and examine the prospects for inflation and real interest rates. 1 See for example O. Blanchard (2019), “Public Debt and Low Interest Rates”, NBER Working Paper no. 25621