New Directions in the Relationship Between Public and Private Debt
Until the 1980s the outstanding indebtedness of government and private-sector borrowers in the United States exhibited sufficient negative covariation that total outstanding debt remained steady relative to nonfinancial economic activity. Three hypotheses -- one based on lenders' behavior, one on borrowers? behavior, and one on credit market institutional arrangements -- provide potential explanations for this phenomenon. Since 1980 the U.S. debt markets have departed from these previously prevailing patterns, however, as both government and private borrowing have risen sharply.
|Date of creation:||Mar 1987|
|Date of revision:|
|Publication status:||published as Friedman, Benjamin M. "New Directions in the Relation Between Public and Private Debt." Science, Vol. 236, No. 4800, (April 24, 1987), pp. 397-403.|
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- Raymond W. Goldsmith & Robert E. Lipsey & Morris Mendelson, 1963. "Studies in the National Balance Sheet of the United States, Vol. 2," NBER Books, National Bureau of Economic Research, Inc, number gold63-2, September.
- Benjamin M. Friedman, 1982. "Debt and Economic Activity in the United States," NBER Working Papers 0704, National Bureau of Economic Research, Inc.
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