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How fiscal policy affects the price level: lessons from a not so distant past

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  • Antipa, P.

Abstract

The last decade has witnessed large-scale debt accumulation in a number of developed countries. Such increases in debt levels raise questions about the sustainability of public finances and risks of debt monetisation. This letter analyses a historical case study of significant debt accumulation – Britain during the Napoleonic Wars. The author provides evidence on how expectations regarding the sustainability of public finances can affect the price level under extraordinary circumstances.

Suggested Citation

  • Antipa, P., 2015. "How fiscal policy affects the price level: lessons from a not so distant past," Rue de la Banque, Banque de France, issue 13, November..
    • Handle: RePEc:bfr:rueban:2015:13
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    References listed on IDEAS

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    3. Stephen Broadberry & Bruce Campbell & Alexander Klein & Mark Overton & Bas van Leeuwen, 2012. "British Economic Growth, 1270-1870: an output-based approach," Studies in Economics 1203, School of Economics, University of Kent.
    4. Leeper, Eric M., 1991. "Equilibria under 'active' and 'passive' monetary and fiscal policies," Journal of Monetary Economics, Elsevier, vol. 27(1), pages 129-147, February.
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