Examples Financial repression

1 examples

1.1 after world war ii
1.2 china
1.3 after 2008 economic recession

examples
after world war ii

financial repression played important role in reducing debt-to-gdp ratios after world war ii keeping real interest rates government debt below 1% two-thirds of time between 1945 , 1980, united states able inflate away large debt (122% of gdp) left on great depression , world war ii. in uk, government debt declined 216% of gdp in 1945 138% ten years later in 1955.

china

china s economic growth has been attributed financial repression low returns on savings , cheap loans makes possible . has allowed china rely on savings-financed investments economic growth. however, because low returns dampens consumer spending, household expenditures account smaller share of gdp in china in other major economy . however, of december 2014, people’s bank of china started undo decades of financial repression , government allows chinese savers collect 3.3% return on one-year deposits. @ china s 1.6% inflation rate, high real-interest rate compared other major economies”.

after 2008 economic recession

in 2011 nber working paper, carmen reinhart , maria belen sbrancia speculate on possible return governments form of debt reduction in order deal high debt levels following 2008 economic crisis.

access capital, austria has restricted capital flows foreign subsidiaries in central , eastern europe. select pension funds have been transferred governments in france, portugal, ireland , hungary, enabling them re-allocate toward sovereign bonds.