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Evidence (from the Bank of England here) and theory (from Paul Krugman here and Mervyn King here) suggest that when there's a shock and confidence collapses, households think less about their net worth and more about their gross nominal debt burden – specifically its relation to their expected future incomes.
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This is especially bad for debt-laden households, businesses and governments in Southern Europe, which will have little scope to 'inflate away' their debt burden by increasing nominal wages," Brosens said.
If you cannot generate nominal GDP growth, how do you deal with the debt burden?
The scheme is festooned with carrots, chiefly easy terms for poor students, in order to forestall a revolt by the government's nominal supporters in Parliament.Critics say the new fees will create an unmanageable debt burden.
The debt burden is a ratio between the accumulated debt and the GDP, both expressed in nominal terms.
Their debt burden is heavier.
Why does Japan's debt burden matter?
The debt burden varies by location.
Housing markets would clear more quickly if nominal prices were supported by a bout of inflation.And while America's creditors could become nervous if the American government seemed determined to eliminate most of its sovereign debt burden via inflation, a commitment to a slightly higher rate of inflation could help take some of the pressure of debt reduction off a dysfunctional political system.
This would cut Athens' debt burden.
Everyone's debt burden is different.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com