Monday, February 25, 2013

Noah Smith: The effect of excessive debt on economic growth

Okay. In context, Noah doesn't say it in the way the title of my post suggests. However, he says it:

There was plenty of borrowing and lending in the zero-growth periods of the Ming Dynasty, and the Ottoman Empire, and any other long period of economic stagnation.

It's no coincidence, this relation between "plenty of borrowing" and "stagnation".


Juan said...

I think he interprets that historical detail as a good thing: the fact that people are able to borrow during periods of stagnation is evidence for the general thesis of the article, which is that capitalism can carry on with next to no growth.

The Arthurian said...

Hi Juan,
I think you're right about how Noah interprets that detail. But without interpretation, Noah offers something like a correlation between "plenty of borrowing" and "stagnation". I do enjoy pointing out such things.

Thanks Juan.