An interdisciplinary working group coordinated by the Berlin-Brandenburg Academy of Sciences and Humanities (BBAW) and also comprising the German National Academy of Sciences Leopoldina, acatech - German Academy of Science and Engineering and the Junge Akademie explored the causes, effects and limits of public debt in democracies.
Two situations have given the long-disputed topic of national debt a very prominent position in the public arena: first, the explosion of public debt worldwide as a result of the severe financial and economic crisis that began in 2008, followed by the debt crises in some eurozone countries since 2010; and second, the incorporation of “debt brakes” in the Basic Law of the Federal Republic of Germany in mid-2009, coupled with the subsequent and partially successful endeavours by the Federal Government to persuade other eurozone members to include similar regulations in their constitutions.
The points of view on public debt espoused by the media, political decision-makers and scientists are not only extremely controversial, they are also often based on dogma, economic interests, false analogies and inadequate knowledge of economic cycles and political processes. Also, Germany’s experience of two periods of hyperinflation in the first half of the 20th century means that here in particular people are often influenced by the fear that high public debt could lead once again to the horror of hyperinflation.
It is therefore essential to make debate on the issue more objective and to provide fundamental answers to the major questions relating to public debt. This conviction led the German National Academy of Sciences Leopoldina and the Berlin-Brandenburg Academy of Sciences and Humanities to set up an interdisciplinary working group. The group’s members included experts from the fields of economics, political science, sociology, history, and public and constitutional law.
ML = Member of the Leopoldina
Scientific Officer, Department Science - Policy - Society
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