The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
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