Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- 1 Introduction
- 2 The efficient design of public debt
- 3 Indexation and maturity of government bonds: an exploratory model
- 4 Public confidence and debt management: a model and a case study of Italy
- 5 Confidence crises and public debt management
- 6 Funding crises in the aftermath of World War I
- 7 The capital levy in theory and practice
- 8 Episodes in the public debt history of the United States
- 9 The Italian national debt conversion of 1906
- 10 Fear of deficit financing – is it rational?
- 11 Government domestic debt and the risk of default: a political–economic model of the strategic role of debt
- Index
1 - Introduction
Published online by Cambridge University Press: 05 July 2011
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- 1 Introduction
- 2 The efficient design of public debt
- 3 Indexation and maturity of government bonds: an exploratory model
- 4 Public confidence and debt management: a model and a case study of Italy
- 5 Confidence crises and public debt management
- 6 Funding crises in the aftermath of World War I
- 7 The capital levy in theory and practice
- 8 Episodes in the public debt history of the United States
- 9 The Italian national debt conversion of 1906
- 10 Fear of deficit financing – is it rational?
- 11 Government domestic debt and the risk of default: a political–economic model of the strategic role of debt
- Index
Summary
In the 1980s the US public debt has grown rapidly and raised questions about the sustainability of deficits. The same issue has been raised in Europe where debt management is a topic of considerable concern today. While in Germany fiscal retrenchment was the result of a fiscally conservative philosophy, in other countries the debt issue has moved to the forefront because debts were reaching perilous levels. Belgium, Ireland and Italy all have ratios of debt to GDP of 100% or more and Greece is rapidly getting there. Debt service absorbs a significant share of government revenue in these countries, and shocks to real interest rates or to economic growth threaten to launch debt-income ratios onto an explosive path.
This introductory chapter spells out some of the issues and then offers a preview of the papers in this collection.
A brief tour of debts and deficits
Table 1.1 shows the evolution of debts in the 1980s. Every country, with the exception of Luxemburg and the UK, had higher debt ratios at the end of the decade than at the beginning. The reason for the generalized increase in indebtedness are three:
– The sharp increase in real interest rates, in many cases a shift from negative to positive rates. When in the early 1980s the US shifted to a sharply anti-inflationary monetary stance and other countries joined, in part to avoid even further dollar appreciation and imported inflation, world real interest rates turned sharply positive.
- Type
- Chapter
- Information
- Public Debt ManagementTheory and History, pp. 1 - 13Publisher: Cambridge University PressPrint publication year: 1990
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