Luigi Buttiglione, Philip Lane, Lucrezia Reichlin, Vincent Reinhart

The world has not yet begun to deleverage its crisis-linked borrowing. Global debt-to-GDP is breaking new highs in ways that hinder recovery in mature economies and threaten new crisis in emerging nations – especially China. The latest Geneva Report on the World Economy argues that the policy path to less volatile debt dynamics is a narrow one, and it is already clear that developed economies must expect prolonged low growth or another crisis along the way.

Table of contents

1 Introduction

1.1 Motivation and main conclusions

1.2 Leverage: What we mean by it and why it matters

1.3 Guide to the report

2 Global debt analysis: Deleveraging? What deleveraging?

3 Leverage cycles and the poisonous combination of rising leverage and slowing growth

3.1 Leverage cycles and debt capacity

3.2 A poisonous combination of high leverage and slower output

Appendix 3A: The Leverage cycle

Appendix 3B: Debt capacity

4 Case studies

4.1 The United States

4.2 Eurozone: A policy problem

4.3 Emerging markets: The next crisis?

5 Policy issues 75

5.1 What have we learnt from past crises?

5.2 Policy options. Where are we now?

6 Discussions

Morning discussion

Afternoon discussion