Discussion Paper Details

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Title: Funding the Great War and the beginning of the end for British hegemony

Author(s): Martin Ellison, Thomas J Sargent and Andrew Scott

Publication Date: July 2019

Keyword(s): British Hegemony, National Debt and World War I

Programme Area(s): Economic History and Monetary Economics and Fluctuations

Abstract: Britain was the richest country in the world at the outbreak of the Great War, benefitting from all the resources of an industrialised country and a large empire. Funding the war contributed to the beginning of the end for British hegemony. Financiers in London extracted a high price for lending their money to the government to pay for the supplies and munitions needed to win the war. The US extracted a similarly high price for lending to Britain during the war. Russia never paid its war debts to Britain; France, Italy and Belgium got off lightly; but for a long time the US insisted on Britain repaying in full.

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Bibliographic Reference

Ellison, M, Sargent, T and Scott, A. 2019. 'Funding the Great War and the beginning of the end for British hegemony'. London, Centre for Economic Policy Research.