You can refer to a very recent discussion on

https://www.nber.org/digest/jul19/w25768.shtml

https://www.researchgate.net/deref/https%3A%2F%2Fwww.nber.org%2Fdigest%2Fjul19%2Fw25768.shtml

See Preprint Debunking the Relevance of the Debt-to-GDP Ratio

Dear Olatunji

Here are some references to consider on your topic:

Working Paper From Financial Crash to Debt Crisis

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1750734

https://www.econstor.eu/handle/10419/71832

Article The European Sovereign Debt Crisis

@ Raymond, thank you. The article is very interesting.

Dear Colleagues and Friends from RG, A significant increase in the level of debt is often a source of the financial and economic crisis. Many examples are known to support this thesis. In the past, a significant increase in the level of debt has caused serious financial and economic problems in many economic entities, including financial institutions as well as other types of public entities, organizations and institutions. Serious financial problems also led to a permanent loss of financial liquidity and the announcement of the insolvency of a particular business entity, company, corporation, bank, etc. This problem applies not only to entities surveyed in the microeconomic approach, i.e. individual economic entities. This problem has also often involved the macroeconomic approach, when the high debt of public finances led to the declaration of the state's financial insolvency, i.e., e.g. declaration of the state's insolvency towards the creditors of foreign financial institutions that have previously granted loans or purchased treasury bonds. I study the issues in the context of analyzing the sources of the global financial crisis that appeared in the autumn of 2008. When this crisis developed, many companies, corporations and banks had serious financial problems, which were caused by a strong increase in debt. Then, if the state had not launched various rescue programs for banks and corporations, many of these entities would have collapsed and the global financial crisis of 2008 would have been even more serious than it had been. On the other hand, the effect of launching these rescue programs was a significant increase in public finance indebtedness in many countries. This increased state of public finance indebtedness in many countries persists to date. In some countries, this level of public finances debt is so high that without high economic growth it is practically impossible to quickly reduce this debt. Therefore, such countries are still exposed to the emergence of further economic crises if the current rate of economic growth drops significantly. In order to improve this situation, governments of individual countries are trying to activate entrepreneurship and innovation in their countries. However, this activation also requires spending further amounts of money from the state budget for development purposes. However, it is necessary for the economic growth to improve, for the income, consumption, investments to increase, for the unemployment to fall, etc. Thanks to this type of effective entrepreneurship activation and creation of facilitations for the development of business entities, it is possible to gradually reduce the level of debt both in microeconomic terms individual business entities as well as in macroeconomic terms, i.e. in the situation of analyzing the systemic debt risk in the entire economy and in relation to the state of public finance indebtedness. I am researching this issue in correlation with the issue of improving credit risk management in financial institutions. Mistakes made in many business entities and institutions, including public institutions, also in central banking led to a significant increase in crediting of consumption, purchase of flats and houses, crediting economic enterprises and new investment projects before 2008 and led to the largest global financial crisis in the history of development economic world. It is therefore necessary to constantly improve the credit risk management process as well as other categories of financial, banking, market, operational, IT systems, etc.

I conduct research in this area. The conclusions of the research I published in scientific publications that are available on the Research Gate portal. I invite you to cooperation.

Best wishes

Dariusz Prokopowicz