The questions raised by debt

The global debt ratio has risen considerably since the 1990s. This raises a number of questions: Why has the debt ratio risen? The only possible answer is that the transformation of savings into investment has been decreasingly direct and done increasingly via debt. This may have resulted from expansionary monetary policies and the growing weight of public and household mortgage debt; Has the increase in debt been efficient and financed the right investments? The growing weight of finance related to public transfer spending and housing is regrettable , as is the fact that rich countries’ external debt has been financed by poor countries’ savings; Is the high debt ratio dangerous? This is not the case as long as interest rates remain very low relative to the growth rate. A rise in interest rates would stem primarily from a rise in inflation; What mechanisms could drive up inflation? A change in the functioning of labour markets; a geopolitical crisis that led to a sharp rise in oil prices.