Debt and Deleveraging
In this article, McKinsey Global Institute researchers assess the increases in debt and leverage in ten mature economies and four emerging economies â€“ breaking down that data by each countryâ€™s financial, household, non-financial business and government sectors. The authors then analyse the sustainability of current levels of leverage in those sectors and construct a â€˜heat map of deleveragingâ€™. The map shows which sectors in which economies are most likely to deleverage. Third, the authors analyse 45 episodes of deleveraging since 1930, focusing on the 32 episodes that occurred after a financial crisis. From these episodes, the authors draw insights into the macroeconomic channels through which a country can deleverage. Finally, they discuss the policy and business implications of the findings.
Volume (Year): 11 (2010)
Issue (Month): 2 (April)
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