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IMF Working Papers
The interest rate-growth differential (IRGD) shows a marked correlation with GDP per capita. It has been on average around one percentage point for large advanced economies during 1999-2008; but below -7 percentage points among non-advanced economies-exerting a powerful stabilizing influence on government debt ratios. We show that large negative IRGDs are largely due to real interest rates well below market equilibrium-possibly stemming from financial repression and captive and distorteddoi:10.5089/9781463924553.001 fatcat:7omq6liunndalbcw7jd34gchom