Government debt (Reinhart and Sbrancia)

The liquidation of government debt, by Carmen M. Reinhart and M. Belen Sbrancia, published by PIIE. The aim of this paper is to document the more subtle and gradual form of debt restructuring or “taxation” that has ocurred via financial repression. They show that such repression helped reduce lofty mountains of public debt in many of the advanced economies in the decades following World War II and subsequently in emerging markets, where financial liberalization is of more recent vintage.