The Importance of Debt in the Global Economy

The composition of GDP is arguably even more important for households and businesses as they contribute to consumption and investment. If governments take on debt to endlessly fund projects that don't produce a positive economic return, then they will eventually go broke. A lot of the spending on stimulus measures during the pandemic won't have much of a long-term positive effect on the economy's output. Global net worth as a portion of GDP is up by roughly 50% in the last 50 years, and 25% in the past 20 years alone.