Is There Too Much Business Debt?
Abstract: By many measures, nonfinancial corporate debt has been increasing as a share of GDP and assets since 2010. As the May Federal Reserve Financial Stability Report explained, high business debt can be a financial stability risk because heavily indebted corporations may need to cut back spending more sharply when shocks occur. Our bloggers review measures of corporate leverage in the United States and find that, although corporate debt has soared, concerns about debt growth are mitigated in part by higher corporate cash flows.
JEL Classification: G3;
File(s): File format is text/html https://libertystreeteconomics.newyorkfed.org/2019/05/is-there-too-much-business-debt.html
Provider: Federal Reserve Bank of New York
Part of Series: Liberty Street Economics
Publication Date: 2019-05-29