Government Debt Management and Monetary Policy in Britain Since 1919
36 Pages Posted: 20 Jun 2012
Date Written: May 2012
Abstract
The enormous increase in the United Kingdom’s national debt during the two world wars of the 20th century meant that government debt management, which had hitherto been regarded as a matter of ‘budgetary convenience’, acquired great macroeconomic significance. The paper examines and compares four episodes in the management of the national debt since 1919 and in each case explores the relationship between debt management and monetary policy. In some episodes, debt management and monetary policy were mutually supportive, but in 1932-38, they were not. In the past few years the macroeconomic significance of government debt management has increased again, and the paper discusses the current policy of quantitative easing from the perspective of the earlier episodes.
Full publication: Threat of fiscal dominance?
Keywords: Government debt management, monetary policy, central banking, United Kingdom
JEL Classification: E5, H6, N1
Suggested Citation: Suggested Citation
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