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The Persistency of Public Debt

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  • Rösel, Felix

Abstract

This paper shows that geographic patterns in public debt can be highly persistent despite drastic external shocks. I compare pre-Nazi debt in 60 districts and 132 large cities of the German Reich with current local government debt. German local government debt completely defaulted after WWII. I find that 1932 and 2012 debt is highly correlated in cities which saw a re-installation of their pre-Nazi mayor by the Allies in 1945. Comparable cities without personnel continuity do not exhibit a robust correlation. Intertemporal personnel links thus constitute a main channel through which to explain long-term persistency in public finance.

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  • Rösel, Felix, 2016. "The Persistency of Public Debt," VfS Annual Conference 2016 (Augsburg): Demographic Change 145595, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145595
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    More about this item

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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