The Falling Marginal Productivity of Debt

However, we can look at how much additional GDP is added for each newly-borrowed dollar. This is called marginal productivity of debt. This shows a clear picture, a secular decline over many decades. To produce this graph, take change in GDP divided by change in debt.

I encourage you to read:

Add to the above this concerning article on the lack of US savings:

One response to “The Falling Marginal Productivity of Debt

  1. Nothing new about diminishing marginal returns…

    Combine this with Amir Sufi’s House if Debt and the conundrum that China is facing.

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