r vs g rule: when nominal interest rate (r) > nominal growth rate (g), debt-to-income expands automatically even with zero primary deficit. The r-g spread is the single most important variable for long-run sovereign debt sustainability.
r vs g rule: when nominal interest rate (r) > nominal growth rate (g), debt-to-income expands automatically even with zero primary deficit. The r-g spread is the single most important variable for long-run sovereign debt sustainability.