DP1357 Sustainability of High Public Debt: What the Historical Record Shows

Author(s):	Albrecht Ritschl
Publication Date:	February 1996
Keyword(s):	Debt Retirement, Default, Growth, Reparations, War Finance
JEL(s):	E6, H6, N1, N4
Programme Areas:	Human Resources
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=1357

Proposals for reducing high public debt are sometimes viewed with scepticism, both because of adverse consequences for growth and political economy considerations. This paper looks into the debt history of Britain, Germany and France, to gain more insights into why national debt was accumulated and how it was reduced. The historical evidence studied here leaves only a limited role for public choice interpretations, as most of the historical debt record was dominated by international conflict. Whichever strategy towards reducing the debt burden was adopted, there seem to be no visible effects on long-term growth performance.