Reducing Public Debt in the Aftermath of the Financial Crisis: Renewing with Financial Repression

Since the 2008 financial crisis burst, public finance accounts in developed economies have been continuously deteriorating; both fiscal and monetary policies are reaching their limits, while unemployment rates are soaring and GDP growth is fragile, if not inexistent. The aim of this article is to consider the options at the hand of developed economies for reducing the public debt burden. Section 1 draws a picture on the general economic outlook in the developed economies and emerging countries. Section 2 considers the different ways in which a country’s debt burden can be diminished. Section 3 defines the concept of debt financial repression and its main features. Section 4 focuses on researchers’ work on historical data, to measure the debt erosion after WW2 and section 5 analyses the current economic situation and tries to assess whether the outlook is similar and whether a similar eroding process is worth considering. Section 6 concludes.