Debt sustainability in historical perspective: The role of fiscal repression

Hans-Joachim Voth and Mauricio Drelichman

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This article examines the debt history of two contenders for European hegemony: 16th-century Spain and 18th-century Britain. We analyze their fiscal behavior using measures of overborrowing and fiscal policy functions. Our results suggest that stringency was not key for Britain’s success in avoiding default. Instead, fiscal repression allowed the United Kingdom to borrow at below-market rates, thereby outspending its continental rivals.

JEL-codes: E4 F41 N23 (search for similar items in EconPapers)
Date: 2008-05
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Citations: View citations in EconPapers (17)

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Journal Article: Debt Sustainability in Historical Perspective: The Role of Fiscal Repression (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1184

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