I want to deepen my understanding of risks as posed by debt burdens among actors of an economy. After some literature review, it seems the matter is nuanced; points can be made for both sides. I'll present a few points simply for context.
If debt burdens are distributed more uniformly (diffuse), then credit can be extended to many SMEs and likely to benefit employment and other long run growth drivers. Also, less concentrated risk may spread out debt burdens and make servicing more manageable.
If debt burdens are concentrated, then regulators will be able to pursue more effective macroprudential policies. For example, entrusting asset management companies to take care of NPLs and free up bank resources so they may lend more.
Is this a debated position in the broader field of economics or is there clear theoretical framework and/or empirical evidence for one being better than the other for "safe" long run economic growth?