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Partisan politics and Public Debt: The importance of the Whig Supremacy for Britain’s Financial Revolution

It has become common for authors to argue that government commitment to repay debt depends upon institutions. In this article I present new econometric evidence which shows that in one prominent case, Great Britain after 1688, credibility depended more immediately upon partisan preferences. The ‘revolution’ in British public finance may indeed have been spurred forward…

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Coordinating Public Debt Management with Fiscal and Monetary Policies: An Analytical Framework

This paper proposes a sovereign asset and liability management framework for analyzing the inter-relationships between debt management, fiscal and monetary policies. It illustrates the consequences of uncoordinated policy mix and extends Sargent and Wallace (1981 and 1993) by including debt This paper—a product of the Banking and Debt Management Department—is part of a larger effort…

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Economic Growth with constraints on Tax Revenues and public Debt: Implications for fical policy and cross-country differences

This paper evaluates optimal public investment and fiscal policy for countries characterized by limited tax and debt capacities. We study a non stochastic CRS endogenous growth model where public expenditure is an input in the production process, in countries where distortions and limited enforceability result in limited fiscal capacities, as captured by a maximal effective…

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