Liquidation of Government Debt (Reinhart & Sbrancia)

The liquidation of government debt by Carmen M. Reinhart and M. Belen Sbrancia. “Historically, periods of high indebtedness have been associated with a rising incidence of default or restructuring of public and private debts. A subtle type of debt restructuring takes the form of ‘financial repression.’ Financial repression includes directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks…”