Government debt levels continue to linger in uncomfortable territory across developed markets, with fiscal deficits stubbornly high despite reasonably resilient growth and employment – especially when compared to past norms. This is not a post-crisis or post-war moment, yet debt levels resemble those of an economy fighting its way out of recession.

Runaway levels of debt, and the question of how they can be contained, could well be the defining macro story of the next decade. This not only has implications for public finances, but also the trajectory of yields, inflation, and the credibility of future policy.

High debt is not new, with history being full of examples of governments facing daunting fiscal positions, and each era has found its own way out: sometimes through discipline, sometimes through inflation, and sometimes through quiet financial engineering. Earlier this year, Rob Burrows explored options for dealing with debt in this blog. Following on from that, below I explore if there are any useful lessons in history which could provide a solution for today’s backdrop.

Financial repression: The silent partner in debt reduction

Growth as the denominator: Britain after the Napoleonic Wars

Inflation: The blunt instrument

So are there any useful lessons from history?

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