Towards a clean solution to excessive public debt levels : beware zero interest rate policies and welcome debt monetisation

Ten years ago public debt levels were already very high in many developed countries and the matter became much worse with the great recession. Since then public debt to GDP ratios have increased by some 30 points and are on average close to 100% among the OECD countries. These levels have very seldom been seen in history and such debt super- cycles have ended with public defaults or a dilution of debt through a combination of growth and high inflation. And even today debt ratios are showing few signs of stabilisation so far in many countries.