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Imagine an economic situation, where people are increasingly borrowing more and spending more at a low interest rate. Assets' values are also growing at a
Imagine an economic situation, where people are increasingly borrowing more and spending more at a low interest rate. Assets' values are also growing at a faster rate. However, the productivity of the businesses is growing at a fixed rate that is lower than the interest rate. Do you think this situation is sustainable? In the long run, how the lenders, borrowers, and businesses would be affected by such an economy?
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