Beware the Government Debt-to-GDP Ratio


Bloomberg Opinion - Quint  | Thu, Sep 3, 2020

by Paul Sheard


Government debt levels around the world are rising fast as governments run up large budget deficits because of the pandemic-induced recession. In judging the level of government debt, and how much of a potential problem it might be storing up for the future, a universally cited metric is the nominal government debt-to-GDP ratio, the amount of government debt expressed as a percentage of gross domestic product. 

Quoting government debt levels as a percentage of GDP is misleading. 

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