Note: This is post #127 in a weekly video series on basic economics.
In the early 2000s, Argentina’s debt reached 150 percent of GDP, leading to what was the largest government default in the history of the world. How does this happen? Why makes a country take on too much debt?
In this video by Marginal Revolution University, economist Alex Tabarrok explains some of the dangers of fiscal policy.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Click here to see other videos in the Introduction to Economics series.