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Zeitgespräch : Finanzielle Repression - ein Instrument zur Bewältigung der Krisenfolgen? ; Die Mechanik der Staatsschulden und ihre Implikationen

Title data

Herz, Bernhard ; Erler, Alexander:
Zeitgespräch : Finanzielle Repression - ein Instrument zur Bewältigung der Krisenfolgen? ; Die Mechanik der Staatsschulden und ihre Implikationen.
In: Wirtschaftsdienst. Vol. 93 (2013) Issue 11 . - pp. 735-739.
ISSN 1613-978X
DOI: https://doi.org/10.1007/s10273-013-1593-2

Abstract in another language

Financial repression committed by central banks has been put forward as a means to secretly reduce the real burden of high public debts. Financial repression has allegedly played an important role in the impressive reduction of the US debt ratio after World War II. A mix of conventional budget consolidation and rapid growth was the main driver in this relative debt reduction with a minor role for financial repression. But does financial repression really exist? The authors express different opinions on evidence for this concept. Those authors who find that there are indicators of financial repression fear redistributive tendencies between debtors and creditors and high opportunity costs in the form of savings and investment distortions. Therefore, financial repression is not a “cure” for the high public debts amassed in the euro area during the recent sovereign debt and banking crisis. Furthermore, the high sovereign debts in the euro area may threaten economic development and impose high costs on society. Therefore, reducing these debts is politically highly relevant, and fiscal policy should be characterised by a modest reduction in government spending and/or tax increases, combined with a policy promoting economic growth. Macroprudential regulations should supplement this financial policy.

Further data

Item Type: Article in a journal
Refereed: No
Subject classification: JEL Classification: E42; E58; G01; H63
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I > Chair Economics I - Univ.-Prof. Dr. Bernhard Herz
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 30 Nov 2017 10:51
Last Modified: 30 Nov 2017 10:51
URI: https://eref.uni-bayreuth.de/id/eprint/40628