Debt is good for growth, but only up to a point. And now, thanks to an extremely helpful article from three economists at the Bank for International Settlements in Basel, Switzerland, we have a good idea where that point is.

Authors Stephen Cecchetti, M.S. Mohanty and Fabrizio Zampolli gathered 30 years of data on levels of household, nonfinancial corporate and government debt for 18 of the world’s major developed economies. They then subjected the data to regression analyses against economic growth. What they found was that when government debt amounts to more than 85 percent of gross domestic product, corporate debt more than 90 percent or household debt more than 85 percent, further indebtedness reduces a country’s ability to grow.

Why is this newsworthy? Well, for a start, the authors point out that in 2010, America’s public debt already amounted to 97 percent of GDP, its corporate debt stood at 76 percent and its household debt at 95 percent. That’s bad news for the country’s growth prospects. The picture in Europe is mixed. At 77 percent, 100 percent and 64 percent, Germany looks reasonably healthy. But at 89 percent, 126 percent and 106 percent, the UK is in trouble. The most indebted country on the list is Japan: 213 percent, 161 percent and 82 percent. These numbers go a long way toward explaining Japan’s chronic growth failures.

Of course, the actual thresholds vary somewhat according to a country’s economic characteristics. And it turns out that the most important characteristics are demographic. Countries with an aging workforce are less able to support high debt levels than countries with younger workers because younger workers produce and save while retirees draw on savings and generally don’t generate wealth. This is hopeful news for the US—where immigration keeps its workforce numbers up—but disastrous for Germany and Japan.

Whatever its economic profile, a developed country’s ability to deliver growth through borrowing and spending is limited. In fact, the best way to tackle debt problems is through spending cuts and limits on borrowing. The trouble is that’s bad for growth as well.

The only thing that seems to be unequivocally good for growth is making it easier for companies to hire and fire young people. But that’s all too often a political no-no, which is ultimately harder for politicians to ignore than an economic yes-yes.

David Champion is a senior editor of Harvard Business Review.