Long-Term Strategies to Reduce Public Debt from a Historical Perspective
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Thomas Mayer
Abstract
Public debt can be reduced in three ways: (1) repayment; (2) default; and (3) indirect default through monetary financing accompanied by debasement or followed by currency reform. In the course of history, repayment was more the exception than the rule, default often the only available way when a government had no control over the currency in which it borrowed, and indirect default more the rule than the exception. In this paper we review the three ways of debt reduction with exemplary references to historical events. We conclude that financial repression supplemented with debt repayment is likely to be the preferred way for public debt reduction today. The alternative would be currency reform.
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Artikel in diesem Heft
- Frontmatter
- Editorial
- The Economists’ Voice, June Issue 2023, Editorial
- Policy Papers
- Davids and Goliaths: Hidden Champions in an Age of Industrial Policy
- Can You Have Your Corporate Wokeism and Eat it too?
- Lessons from Latin America Dollarization in the Twenty First Century
- Measuring Communication Quality of Interest Rate Announcements
- The Political Economy of Transatlantic Security – A Policy Perspective
- Policy Forum: Monetary Policy and the Threat of Fiscal Dominance
- Apolitical Money – An Illusion?
- The ECB’s Transmission Protection Instrument and Fiscal Stability
- Debt Sustainability in the Emerging New EU Fiscal Framework: A Major Change
- Government Bond Spreads in the Euro Area
- Selective Bond Purchases – May the ECB Chose Winners and Losers?
- Britain’s Failed Attempt at Monetary and Fiscal Exceptionalism
- Government Debt and Monetary Policy Perspectives in Japan
- Long-Term Strategies to Reduce Public Debt from a Historical Perspective
