Government Debt Management and Monetary Policy in Britain Since 1919

36 Pages Posted: 20 Jun 2012

See all articles by William A. Allen

William A. Allen

National Institute of Economic and Social Research

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

Allen, William A., Government Debt Management and Monetary Policy in Britain Since 1919 (May 2012). BIS Paper No. 65b, Available at SSRN: https://ssrn.com/abstract=2078925

William A. Allen (Contact Author)

National Institute of Economic and Social Research ( email )

2, Dean Trench Street
London, SW1P 3HE
United Kingdom

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