Debt sustainability in historical perspective: The role of fiscal repression

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.

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Year of publication:	2008-05
Authors:	Voth, Joachim ; Drelichman, Mauricio
Institutions:	Department of Economics and Business, Universitat Pompeu Fabra

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	E4 - Money and Interest Rates ; F41 - Open Economy Macroeconomics ; N23 - Europe: Pre-1913
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008540958