Reducing High Public Debt Ratios: Lessons from UK Experience

Nicholas Crafts

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

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 World War II but remained stubbornly high despite large budget surpluses with price deflation after World War I. 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.

Keywords: balanced budget; debt reduction; financial repression; fiscal rule; fiscal sustainability (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (1)

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http://www2.warwick.ac.uk/fac/soc/economics/resear ... /199-2014_crafts.pdf

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Journal Article: Reducing High Public Debt Ratios: Lessons from UK Experience (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:199

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