IMF Working Papers

Public Debt Through the Ages

Author/Editor:

Barry J. Eichengreen ; Asmaa A ElGanainy ; Rui Pedro Esteves ; Kris James Mitchener

Publication Date:

January 15, 2019

Electronic Access:

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Summary:

We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many of these episodes resulted in debt-management problems resolved through debasements and restructurings. Less widely appreciated are successful debt consolidation episodes, instances in which governments inheriting heavy debts ran primary surpluses for long periods in order to reduce those burdens to sustainable levels. We analyze the economic and political circumstances that made these successful debt consolidation episodes possible.

Series:

Working Paper No. 19/6

Subject:

Cost of living Debt burden Economic growth Economic integration External debt Financial crises National income Public debt Sovereign debt