Global debt shocks hit developing countries hardest, hindering economic growth.
Global debt has a big impact on economic growth. A study shows that when a country has a lot of debt, its future economic output goes down. This effect is strongest in developing countries and those with fixed exchange rates. Different types of debt affect the economy in different ways, so it's important to look at public and private debt separately. Policymakers can use this information to decide how much debt is okay and what kind of exchange rate system is best for economic growth.