IMF paper warns low inflation will increase G-7 debt burden
Low inflation levels could make reducing public debt ‘more difficult'
Allowing inflation rates to drop to zero for the next five years would increase the average debt-to-GDP ratio in the G-7 countries by around five percentage points, according to a working paper published by the International Monetary Fund (IMF) today.
In Inflation and Public Debt Reversals in the G-7 Countries, Bernardin Akitoby, Takuji Komatsuzaki and Ariel Binder argue that letting inflation "drop to very low levels for an extended period would make the task of tackling high levels of public
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