Crafts, N. F. R. (2016) Reducing high public debt ratios : lessons from UK experience. Fiscal Studies, 37 (2). pp. 201-223. doi:10.1111/j.1475-5890.2015.12064

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Abstract

This paper examines contrasting experiences of the United Kingdom in addressing high public debt to GDP ratios following major wars. A clear message is that interest rate / growth rate differentials were more important than primary budget surpluses for the different outcomes. The debt to GDP ratio fell very rapidly under financial repression following the Second World War but remained stubbornly high despite large budget surpluses with price deflation after the First World War. Implications for policymakers today are that averting price deflation is a high priority and that supply-side policies that raise growth could play an important part in debt reduction.

Item Type:	Journal Article
Subjects:	D History General and Old World > DA Great Britain H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	World War, 1914-1918 -- Economic aspects -- Great Britain , World War, 1939-1945 -- Economic aspects -- Great Britain , Budget deficits , Debts, Public, Interest rates , Gross domestic product, Economic development
Journal or Publication Title:	Fiscal Studies
Publisher:	Wiley-Blackwell Publishing, Inc
ISSN:	0143-5671
Official Date:	6 June 2016
Dates:	Date Event 6 June 2016 Published 23 December 2015 Available 28 May 2015 Accepted
Volume:	37
Number:	2
Page Range:	pp. 201-223
DOI:	10.1111/j.1475-5890.2015.12064
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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