Section

Embrace debt-to-GDP ratio, instead of rigid deficit targets

By Economic Times - 3 months ago
Debt-to-GDP ratio compares a country's debt with its productive capacity, sending policymakers more appropriate and incentive-compatible signals. When a government incurs a deficit during a period of economic slack and directs this spending towards growth-inducing capex, the resulting higher debt may lead to enhanced economic growth and productivity, ultimately improving the debt-to-GDP ratio in the long run.

Disclaimer : Mymoneytimes implements extreme caution and care in collecting data before publication. Mymoneytimes does not liable for the adequacy, accuracy or completeness of any given information. Hence we are not liable for any kind of direct or indirect loss caused by the use of such information.