Working Paper: CEPR ID: DP15347
Authors: Eric Monnet; Blaise Truonglo
Abstract: A country's public debt figures vary considerably in any given year, depending on the definitions used. It creates difficulties in constructing and interpreting long-term statistical series. We examine why and discuss the policy issues behind the definition and accounting of public debt in history. Based on a critical analysis of widely used historical sources, as well as case studies, this chapter discusses how to interpret historical public debt statistics. We examine general trends in the historical development of comparability of public debt statistics since the nineteenth century and distinguish three perspectives on debt accounting that have framed the construction of statistics over time: “financial”, “circuitist” and “benchmarking”. Since public debt accounting and policy depend on the way in which public debt is issued and traded and on the identity of creditors, each of these ideal types roughly corresponds to a historical period of capitalism.
Keywords: public debt
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Definition of public debt (H63) | Political and economic implications of these definitions (F69) |
| Accounting practices used to define public debt (H63) | Perceptions of fiscal sustainability (E62) |
| Historical evolution of public debt accounting practices (H63) | Perception and management of public debt in economic policy (H63) |
| Reliance on gross debt figures (H63) | Misrepresentation of the financial health of a state (H74) |
| Accounting definitions (M41) | Policy decisions (D78) |
| Accounting choices (M41) | Political motivations and economic theories (E65) |