This is, in its historical context, just bizarre:
- What happened to the 90% debt-to-annual-GDP redline?
- What happened to the claim that the idea of secular stagnation—that interest rates were likely to be at or neat the zero lower bound for decades to come—would be forgotten in a decade?
- What happened to the claim that "low sovereign bond yields do not necessarily capture the broader ‘credit surface’ the global economy faces"?:
Ken Rogoff: Never Mind The Debt: If There’s A Hard Brexit Britain Will Have to Splash the Cash: "What’s the point of saving for a rainy day if you don’t use the savings in an epic storm? Instead of attempting to reduce the UK’s debt-to-GDP ratio (now 84%), the government should find ways to strengthen investment in physical and human capital, to help the poorest, who will be hit the hardest, and to incentivise international businesses not to abandon ship.... It has never been remotely obvious to me why the UK should be worrying about reducing its debt–GDP burden, given modest growth, high inequality and the steady (and largely unexpected) decline in global real interest rates. It is one thing to have an exit plan for controlling the rate of debt increase after a deep financial crisis; it is entirely another thing to be in any rush to bring debt levels down.... Yes, it is wise not to let debt grow inexorably, but there is also no need to run suddenly into reverse...