Public and Public plus Private debt to GDP

January 29, 2013

(This article was first published on plausibel, and kindly contributed to R-bloggers)

Update 2: Put up a second graph showing debt of Spain.

Update: I just read the most recent article of Stiglitz. I mostly agree. However, I’m not quite sure what he means when he says that

Spain and Ireland had fiscal surpluses and low debt/GDP ratios before the crisis.

I updated the graph below with the Reinhardt and Rogoff data, now including Ireland. Not exactly a low debt to GDP ratio. I’m pretty positive that one cannot ignore this amount of debt, whether it’s held by private or government.

This data comes from “This Time is Different” by Carmen Reinhart and Kenneth Rogoff. “Eight Centuries of Financial Folly” is the subtitle. It’s the first complete (over time) piece of empirical work on  the full spectrum of “financial crisis”.

In the plot you can see the importance of privately held debt in a country. Look at the UK for example. Periods where the sum of public and private debt is lower than public debt only correspond to periods where the country was a net saver, i.e. the private sector saved more than the public sector borrowed. (I think.)

code on github

UPDATE: As a special courtesy, here’s the data for this graph in a google spreadsheet. of course you’ll have to change the code to read that in with R. Download as .csv and use read.csv() instead of read.xlsx() in the code.

To leave a comment for the author, please follow the link and comment on their blog: plausibel. offers daily e-mail updates about R news and tutorials on topics such as: Data science, Big Data, R jobs, visualization (ggplot2, Boxplots, maps, animation), programming (RStudio, Sweave, LaTeX, SQL, Eclipse, git, hadoop, Web Scraping) statistics (regression, PCA, time series, trading) and more...

If you got this far, why not subscribe for updates from the site? Choose your flavor: e-mail, twitter, RSS, or facebook...

Comments are closed.

Search R-bloggers


Never miss an update!
Subscribe to R-bloggers to receive
e-mails with the latest R posts.
(You will not see this message again.)

Click here to close (This popup will not appear again)