Part 10/12:
Credit growth: too much leads to bubbles, too little hampers growth
Debt levels: excessive debt causes crises, low debt constrains expansion
Price stability: avoiding runaway inflation or damaging deflation
It requires prudent policy, including:
Careful regulation of credit and debt
Counter-cyclic monetary and fiscal measures
Promoting productivity growth to sustain income levels
Key Takeaways for Individuals and Policymakers
Avoid rapid debt accumulation relative to income to prevent unsustainable burden.
Prioritize productivity growth—innovation and education—to ensure long-term income increases surpass debt costs.
Monitor credit availability—easy credit drives growth but also risk.