How might the UK's Debt-GDP ratio be reduced? Evidence from the last 120 years

Michael R. Wickens

No 17172, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The motivation for this paper is concerns in the UK with how to bring down the currently high level of the debt-GDP ratio. We consider whether anything can be learned from previous experience over the last 120 years by examining the contributions both to the increase in the debt-GDP ratio and to the reduction of the debt-GDP ratio of various components of the government budget constraint: the primary deficit, growth, inflation and interest rates and payments. We also examine the effectiveness of policy in influencing these components. We conclude by suggesting a combination of these components that might be economically and politically achievable.

Keywords: Debt-gdp ratio; Primary deficit; Growth; Inflation (search for similar items in EconPapers)
JEL-codes: E62 H63 (search for similar items in EconPapers)
Date: 2022-04
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