The Bank of England and the Government Debt: Operations in the Gilt-Edged Market, 1928–1972. By William A. Allen. Cambridge: Cambridge University Press, 2019. Pp. 274. $42.00, hardcover.

2020 ◽  
Vol 80 (1) ◽  
pp. 296-298
Author(s):  
Seán Kenny
2017 ◽  
Vol 241 ◽  
pp. R13-R32
Author(s):  
Michael McMahon

A defining feature of (at least) the last three general elections has been the emphasis placed on each political party's fiscal credibility and their ability to deliver “sound public finances”. Applying the logic of household book-keeping, balancing the fiscal budget is said to capture such soundness. There is, however, little evidence that a balanced budget is necessarily sound. Instead, the evolution of public finances depends on (1) both the fiscal choices made on the level of spending and taxation, (2) the underlying growth of the economy which depends on far more than the fiscal decisions, and (3) interest rates on government debt and the financing needs of the government. As the economic situation changes, so too does the likely path of debt to GDP and hence the possible fiscal options open to a country. Sticking to the soundbite of “sound finances” has often distracted from the underlying menu of political choices and as such is a disruptive narrative in UK economics today.


2020 ◽  
Vol 006 (02) ◽  
pp. 325-330
Author(s):  
Nugroho Suryo Bintoro

The growth of central government debt in Indonesia is the subject of endless discussion for both economists and experts in other fields. Although the government uses this debt in order to increase Indonesia's competence through infrastructure development, there are problems in the form of previous accumulated debts. This accumulative debt is known as the concept of “debt stock” which is assessed through Indonesia's fiscal resilience (APBN) to measure the repayment capacity of new debts that will be made in the future. This ability will be seen using long-term data from 1990 to 2016 which is reflected in the variables of central government debt, government spending and revenue so that it is known that Indonesia's central government debt can still be said to be sustainable and the Indonesian government should prioritize productive expenditures in order to increase government revenues.


2016 ◽  
Vol 21 (6) ◽  
pp. 1454-1483 ◽  
Author(s):  
Noritaka Maebayashi ◽  
Takeo Hori ◽  
Koichi Futagami

We construct an endogenous growth model that includes productive public capital and government debt. We assume that the government debt-to-GDP ratio is gradually adjusted to a target level, reflecting the permanent commitment rules in the Stability and Growth Pact or the Maastricht Treaty in the European Union (i.e., the well-known 60% rule). These rules affect government borrowing and public investment. Here, we examine the welfare implications of the permanent commitment rules. We find that fiscal consolidation based on the rules improves social welfare. Moreover, the improvement in welfare accelerates as fiscal consolidation progresses more rapidly. Last, we also discuss and derive the optimal long-run debt-to-GDP ratio.


2021 ◽  
pp. 45-50
Author(s):  
Rob Kitchin

This chapter imagines a conversation between two senior civil servants when they realize that the Irish government has lost 3.6 billion euros through a spreadsheet error. The Assistant Secretary of the Department of Finance reports to the General Secretary that the accountant was not sure how to classify a loan to the Housing Finance Agency (HFA) from the National Treasury Management Agency (NTMA). They had assumed that it might be adjusted for elsewhere in the General Government Debt calculations, but it was not. As such, the government debt appears twice in the national accounts, once as an asset for the NTMA and once as a liability for the HFA. The General Secretary then asks why the data entry error was not picked up. The Assistant Secretary answers that everybody assumed that somebody else had dealt with it. The accounts got returned, nobody spotted the mistake, and everyone moved onto to other tasks.


Author(s):  
Morton Guy ◽  
Marsh Andrew

This chapter talks about the Bank of England as the UK's central bank, which was established in 1694 by a Charter granted by King William III and Queen Mary II under the authority of an Act of Parliament. It explains the principal object of the Act in creating the Bank as a vehicle for raising money for the government. It also discusses how the Bank was closely associated with the raising and management of the national debt since its inception, which is a function that the Bank retained until the creation of the UK Debt Management Office (DMO) in 1998. This chapter highlights how the Bank raised money by issuing of banknotes, which became widely used as a convenient means of making large—value payments. It points out that the Bank of England notes were not formally legal tender until 1833.


Author(s):  
Mavis Batey

Dilly Knox, the renowned First World War codebreaker, was the first to investigate the workings of the Enigma machine after it came on the market in 1925, and he developed hand methods for breaking Enigma. What he called ‘serendipity’ was truly a mixture of careful observation and inspired guesswork. This chapter describes the importance of the pre-war introduction to Enigma that Turing received from Knox. Turing worked with Knox during the pre-war months, and when war was declared he joined Knox’s Enigma Research Section at Bletchley Park. Once a stately home, Bletchley Park had become the war station of the Secret Intelligence Service (SIS), of which the Government Code and Cypher School (GC&CS) was part. Its head, Admiral Sir Hugh Sinclair, was responsible for both espionage (Humint) and the new signals intelligence (Sigint), but the latter soon became his priority. Winston Churchill was the first minister to realize the intelligence potential of breaking the enemy’s codes, and in November 1914 he had set up ‘Room 40’ right beside his Admiralty premises. By Bletchley Park’s standards, Room 40 was a small-scale codebreaking unit focusing mainly on naval and diplomatic messages. When France and Germany also set up cryptographic bureaux they staffed them with servicemen, but Churchill insisted on recruiting scholars with minds of their own—the so-called ‘professor types’. It was an excellent decision. Under the influence of Sir Alfred Ewing, an expert in wireless telegraphy and professor of engineering at Cambridge University, Ewing’s own college, King’s, became a happy hunting ground for ‘professor types’ during both world wars—including Dillwyn (Dilly) Knox (Fig. 11.1) in the first and Alan Turing in the second. Until the time of Turing’s arrival, mostly classicists and linguists were recruited. Knox himself had an international reputation for unravelling charred fragments of Greek papyri. Shortly after Enigma first came on the market in 1925, offering security to banks and businesses for their telegrams and cables, the GC&CS obtained two of the new machines, and some time later Knox studied one of these closely.


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