The article discusses how debt levels of companies can lead to less investment and production, especially during economic downturns. This debt-related issue affects the economy differently depending on the business cycle. When debts are taken in fixed amounts, it creates a problem for monetary policy. In times of real and financial shocks, policymakers must balance controlling inflation and stabilizing output. The best approach is to keep expected inflation steady while allowing unexpected inflation to adjust in response to negative shocks, helping to lessen the impact of debt issues and output gaps.