Nonfinancial private sector debt increased significantly in advanced economies prior to the
global financial crisis and, with a few exceptions, deleveraging has been limited.
Furthermore, in some countries households and corporations have continued to accumulate
debt. Drawing on the literature, the paper aims to provide a quantitative assessment of the
gaps between actual and sustainable levels of debt and to identify the key factors that drive
excessive borrowing. Results suggest that variables that are typically found important in
studies focusing on borrowing decisions, are also relevant for explaining the debt