This growth slowdown can either take the form of a gradual tectonic shift, as high levels of debt weigh on new investment. Or it can take the form of an explosive eruption, as we have witnessed during the global financial crisis.
And while both forms raise serious questions for policymakers, it is mainly the latter that today’s conference will address, since financial stability is part of the central banks’ remit. For the reasons I have just outlined, it would probably be a futile undertaking to try to pinpoint exactly when debt starts subtracting from rather than adding to economic welfare.