Working Paper: NBER ID: w21799
Authors: George J. Hall; Thomas J. Sargent
Abstract: Congress first imposed an aggregate debt limit in 1939 when it delegated decisions about designing US debt instruments to the Treasury. Before World War I, Congress designed each bond and specified a maximum amount of each bond that the Treasury could issue. It usually specified purposes for which proceeds could be spent. We construct and interpret a Federal debt limit before 1939.
Keywords: No keywords provided
JEL Codes: E6; H6; N21; N41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| debt limit (H63) | government borrowing capacity (H63) |
| change in policy (O24) | lack of constraint on government borrowing (H60) |
| delegation of authority to Treasury (H63) | more liquid bond market (G10) |