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Inflation not the easy way to cut public debt burdens

One of the key consequences of the coronavirus is set to be a sharp rise in government debt burdens. We have already looked at whether governments can just tolerate their rise in debt here. But this is not their only option. Default is one, austerity is another, but in this Focus, we look at the third – namely inflating the debt away. We start by asking why and how governments would go about this. We then look at whether it would work in practice, before finishing with where we might see it attempted.

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