JRCPPF Director Atif Mian's Research on Debt Cited in "The Economist"
On November 14th, The Economist published an article titled "Pulled Back In: The world is entering a third stage of a rolling debt crisis, this time centred on emerging markets." Among many groundbreaking studies, JRCPPF Director Atif Mian's research on the linkages between debt and GDP growth was cited:
"There are reasons not to overdo the gloom. Evidence suggests that corporate-lending splurges, which account for most of what is being seen in emerging markets, are less damaging than big build-ups in consumer debt of the sort seen in America in the 2000s. A paper by Boris Cournède and Oliver Denk of the OECD, a think-tank, finds that corporate-debt booms are only half as damaging to subsequent growth in GDP per person as soaring consumer debt. Research from Atif Mian and Emil Verner of Princeton University and Amir Sufi of the University of Chicago Booth School of Business also suggests, albeit tentatively, that the link between rising debt and falling GDP growth is weaker where lending is to companies and not households. Declines in house prices might make busts in mortgage lending more damaging than corporate-debt crashes, because they depress the wealth of all consumers, and not just the indebted."