The debtto-GDP ratio fell in the wake of the inflation of World War II and its aftermath, which inflated away the real burden of debt. The updrift in the ratio, however, shortly resumed. As I noted earlier, the trend toward intra-country dispersion is likely occurring not only in the United States but in other countries as well.
The existence of this trend is suggested by the rise in unconsolidated nonfinancial debt of the major industrial economies, excluding the United States, over the past three decades, which has exceeded the growth of GDP by 1.6 percentage points annually.