Positive shock could still trip up advanced economies – Blanchard
Former IMF chief economist warns high debt levels could interact with positive shocks to cause problems
Advanced economies may be showing signs of a turnaround, but a positive shock could still cause problems due to the high levels of debt in many countries, believes the former International Monetary Fund chief economist, Olivier Blanchard.
Economies with very high debt ratios, such as Japan and the eurozone periphery, become much more sensitive to changes in growth and interest rates, said Blanchard.
Speaking at the London School of Economics on March 22, Blanchard highlighted two risks that
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