Financial Repression Redux
Carmen M. Reinhart
Peter G. Peterson Institute for International Economics; National Bureau of Economic Research (NBER)
Jacob F. Kirkegaard
Peter G. Peterson Institute for International Economics
M. Belen Sbrancia
University of Maryland
Finance and Development, pp. 22-26, June 2011
Periods of high indebtedness have historically been associated with a rising incidence of default or restructuring of public and private debts. Sometimes the debt restructuring is subtle and takes the form of, “financial repression.” In the heavily regulated financial markets of the Bretton Woods system, a variety of restrictions facilitated a sharp and rapid reduction in public debt/GDP ratios from the late 1940s to the 1970s. In this paper, we summarize our findings for the post-World War II period for a selected group of countries and document the resurgence of financial repression in the wake of the 2007-2009 financial crises and the accompanying surge in public debts in advanced economies.
Number of Pages in PDF File: 3Accepted Paper Series
Date posted: June 15, 2011
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