In my opinion it’s very important for central banks to target debt growth with an eye toward keeping it at a sustainable level—i.e., at a level where the growth in income is likely to be large enough to service the debts regardless of what credit is used to buy. Central bankers sometimes say that it is too hard to spot bubbles and that it’s not their role to assess and control them—that it is their job to control inflation and growth.4 But what they control is money and credit, and when that money and credit goes into debts that can’t be paid back, that has huge implications for growth and
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