Michael Pettis in Carnegie Endowment for International Peace:
Global debt, according to a recent report by the Institute for International Finance, amounted to nearly $300 trillion in 2021, equal to 356 percent of global GDP. This extraordinarily high debt level represents a 30 percentage-point rise in the global debt-to-GDP ratio in the past five years. No wonder analysts increasingly worry about the possible adverse consequences of excessive debt levels.
Unfortunately, few economists have a clear understanding of why too much debt is a bad thing, let alone how much debt is too much. That makes it hard to know what to worry about and why. Because economists tend to assume that the extent of a country’s debt burden is measured by its national debt-to GDP ratio, they often fail to distinguish between types of debt, instead treating a rise in one country’s debt-to-GDP ratio as equivalent to the same rise in another country’s ratio, even though the two cases may have very different implications.
So when is debt a burden for the economy and why? Crucially, different kinds of rising debt can have very different effects on an economy. Moreover, even in countries that are seen as having too much debt, the adjustment costs can vary significantly.
More here.