Funding the Great War and the Beginning of the End for British Hegemony

22 Pages Posted: 30 Jul 2019

See all articles by Martin Ellison

Martin Ellison

University of Oxford

Thomas J. Sargent

New York University (NYU) - Department of Economics, Leonard N. Stern School of Business; National Bureau of Economic Research (NBER)

Andrew Scott

London Business School - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: July 2019

Abstract

Britain was the richest country in the world at the outbreak of the Great War, benefitting from all the resources of an industrialised country and a large empire. Funding the war contributed to the beginning of the end for British hegemony. Financiers in London extracted a high price for lending their money to the government to pay for the supplies and munitions needed to win the war. The US extracted a similarly high price for lending to Britain during the war. Russia never paid its war debts to Britain; France, Italy and Belgium got off lightly; but for a long time the US insisted on Britain repaying in full.

Keywords: British Hegemony, National Debt, World War I

JEL Classification: N24, N44

Suggested Citation

Ellison, Martin and Sargent, Thomas J. and Scott, Andrew, Funding the Great War and the Beginning of the End for British Hegemony (July 2019). CEPR Discussion Paper No. DP13848. Available at SSRN: https://ssrn.com/abstract=3428370

Martin Ellison (Contact Author)

University of Oxford

Mansfield Road
Oxford, OX1 4AU
United Kingdom

Thomas J. Sargent

New York University (NYU) - Department of Economics, Leonard N. Stern School of Business ( email )

269 Mercer Street
New York, NY 10003
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212-998-3548 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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Andrew Scott

London Business School - Department of Economics ( email )

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London NW1 4SA
United Kingdom
+44 20 7706 6780 (Phone)
+44 20 7402 7875 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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