Macroeconomics: UK economy, IB Economics

Kenneth Rogoff writes an interesting piece about the diminishing ability of government debt to help offer macroeconomic stability at a time of higher interest rates. 

The latest IMF research asserts that the rising levels of debt in developed economies now represents a drag on growth, as it rises to an average 120% of debt-to-income in advanced economies. 

Whilst developed economies rarely default on debt, the opportunity cost of higher debt repayment will limit the ability of fiscal policy to help governments achieve their macroeconomic objectives.