Current Debt Crisis in Historical Perspective
Current Debt Crisis in Historical Perspective
This chapter examines the ongoing debt crisis in advanced economies in historical perspective, with a view to identifying significant drivers of debt accumulation and subsequent debt reductions. The findings indicate that the Great Accumulation episode of the 2000s reflected a combination of primary fiscal deficits, higher real interest rates, and stock-flow adjustments related to the banking and currency crisis, while unfavorable interest-rate growth differentials contributed to the debt accumulation of the Great Depression during the 1930s. For large debt reductions since 1880, the primary fiscal balance did the heavy lifting, except in the post-World War II period, when negative interest-rate growth differentials in the context of capital controls and financial repression contributed favorably.
Keywords: debt crisis, advanced economies, debt accumulation, debt reduction, fiscal deficits, real interest rates, interest-rate growth differential, primary fiscal balance, capital controls, financial repression
MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.
