Working Paper: CEPR ID: DP12605
Authors: Charles A. Goodhart; Michael Hudson
Abstract: In this paper we recall the history of Jubilee debt cancellations, emphasizing what their social purpose was at that time. We note that it would not be possible to copy that procedure exactly nowadays, primarily because most debt/credit relationships are intermediated via financial institutions, such as banks, insurance companies, etc., rather than by governments or wealthy families directly. But we argue that the underlying social purpose of such Jubilees – to keep debt within the reasonable ability to be paid without social and economic polarisation – could be recreated via alternative mechanisms, and we discuss the politico-economic arguments for, and against, doing so
Keywords: inequality; debt-canceling jubilees; Babylonian and Byzantine empires; equity participation; student loans; land tax
JEL Codes: E60; E61; E62; E65; H10; H23; H80; N30; N35; P43; Q15; R52; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Debt jubilees (X) (H63) | economic stability (Y) (E20) |
| Debt jubilees (X) (H63) | preventing excessive debt burdens (Z) (F34) |
| preventing excessive debt burdens (Z) (F34) | economic stability (Y) (E20) |
| modern debt dynamics (A) (E19) | increased financial instability (B) (F65) |
| debt cancellation (C) (F34) | increased financial instability (B) (F65) |
| equity participation (D) (G32) | mitigate wealth inequality (E) (I24) |
| rethinking debt management strategies (G) (H63) | social equity (H) (I14) |
| modern debt practices (I) (F34) | economic polarization (K) (D31) |
| without reform (J) (P19) | economic polarization (K) (D31) |
| historical practices (A) (B15) | modern discussions (B) (B00) |