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Consider the figure below. It shows German and Italian GDP (solid) an.pdf

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Consider the figure below. It shows German and Italian GDP (solid) and government debt (dashed) for the period 1996-2014. Which country is likely to have more sustainable debt? Explain your answer. Which country is more likely to default on its debt and have higher interest rates on government bonds?.

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Consider the figure below. It shows German and Italian GDP (solid) and government debt (dashed) for the period 1996-2014. Which country is likely to have more sustainable debt? Explain your answer. Which country is more likely to default on its debt and have higher interest rates on government bonds?

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