*Should-Read: Nick Bunker: *: Should policymakers worry about the level of debt or the pace of credit growth?: "Other research on the impact of debt and credit on economic output has emphasized the role of household debt... http://equitablegrowth.org/equitablog/should-policymakers-worry-about-the-level-of-debt-or-the-pace-of-credit-growth/
...But Bridges, Jackson, and McGregor find that increases in household debt and business debt have an impact on the depth and length of recessions. This is but one paper in the debate on levels versus increases that’s just beginning and is likely to continue for some time. For economists, and especially for policymakers, the more evidence on what kind of credit growth and what kind of debt—as well as whether to look at the level or the change in them—is available, the more likely it is to be able to smooth out economic fluctuations. Unfortunately, we aren’t quite there yet.