Financial Repression Redux

Finance and Development, pp. 22-26, June 2011

3 Pages Posted: 15 Jun 2011

See all articles by Carmen Reinhart

Carmen Reinhart

National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics; Harvard University - Center for Business and Government; Harvard University, Harvard Kennedy School (HKS), Belfer Center for Science and International Affairs (BCSIA) ; University of Maryland - School of Public Affairs; World Bank; Centre for Economic Policy Research (CEPR); International Monetary Fund (IMF); Harvard University - Harvard Kennedy School (HKS)

Jacob F. Kirkegaard

Peter G. Peterson Institute for International Economics

M. Belen Sbrancia

University of Maryland

Date Written: June 2011

Abstract

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.

Suggested Citation

Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Reinhart, Carmen and Kirkegaard, Jacob F. and Sbrancia, M. Belen, Financial Repression Redux (June 2011). Finance and Development, pp. 22-26, June 2011, Available at SSRN: https://ssrn.com/abstract=1864806

Carmen Reinhart (Contact Author)

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M. Belen Sbrancia

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