Public debt and financial crises in the twentieth century
Schularick, Moritz ;  ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titlePublic debt and financial crises in the twentieth century
AuthorSchularick, Moritz
EditorUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages24 S.
Series ; 2012,1 : Economics
Classification (DDC)336 Public finance
AbstractThe costs of wars have been the main driver of public debt in the Western World during the modern era. The late twentieth century stands out as a period that saw a pronounced increase of government debt to GDP ratios in peacetime. This paper assesses the role that financial crises have played in shaping the public debt trajectory in the twentieth century. Focusing on the experiences of 14 industrial economies, I show that financial crises have long and lasting effects on public finances. I provide evidence that the costs of financial crises have increased strongly in the second half of the twentieth century and that the costs of financial crises grow with the size of the financial sector. In many countries, the rising costs incurred from stabilizing the economy after financial crises were an important cause of the peacetime surge of public debt ratios in the late twentieth century. In today's highly financialized economies, financial crises have become a key risk for public finances.
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FU DepartmentDepartment Business and Economics
Other affiliation(s)John-F.-Kennedy-Institut, Abteilung für Wirtschaft
Year of publication2012
Type of documentBook
Terms of use/Rights Nutzungsbedingungen
Created at2012-02-29 : 01:40:45
Last changed2016-01-05 : 02:38:27
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000013009