Government debt: causes, effects and limits

with Carl-Ludwig Holtfrerich, Lars P. Feld, Werner Heun, Gerhard Illing, Gebhard Kirchgässner, Jürgen Kocka, Wolfgang Streeck, Uwe Wagschal, Stefanie Walter, Carl Christian von Weizsäcker.

The Coordinating Committee of the National Academy of Sciences Leopoldina approved the establishment and funding of an interdisciplinary working group on government debt in the fall of 2011. The subject has been – and remains – a topic of heated debate in politics, the media, business and the public and even between states. Many of the opinions voiced are not only controversial but also frequently based on dogmas, economic interests and false analogies. Two events added fuel to the public debate in Germany: the financial and economic crisis that started in 2007/08, followed by the debt crisis of some euro-area member states in 2010, and the amendment to the German constitution (still known in Germany as the Basic Law, or Grundgesetz) in 2009 to incorporate the debt brake. An interdisciplinary working group called “Government Debt in Democracies: Causes, Effects and Limits”, composed of the Berlin-Brandenburgische Akademie der Wissenschaften (Berlin-Brandenburg Academy of Sciences and Humanities) (lead), acatech – Deutsche Akademie der Technikwissenschaften (National Academy of Science and Engineering) and the Leopoldina – Nationale Akademie der Wissenschaften (German National Academy of Sciences), was formed for the purpose of helping to raise awareness of this topic among policymakers and the public by compiling and answering fundamental questions on government debt.

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