The Forgotten History of Domestic Debt


  •  Corresponding author: Kenneth S. Rogoff, Department of Economics, Harvard University, 1875 Cambridge Street, Cambridge, MA 02138, USA. Email:

  • The authors are grateful to David Nowakowski, Michael Reddell, Vincent Reinhart, Andrew Scott, John Singleton and seminar participants at Columbia, Harvard and Maryland universities for useful comments and suggestions and to Ethan Ilzetzki and Chenzi Xu for excellent research assistance.


The literature on domestic debt default is sparse, as are the data. We compile a database on public debt that spans the nineteenth century to 2010. Our findings are as follows. First, domestic debt accounts for almost two-thirds of public debt. Second, the data help to explain the puzzle of why countries default on external debts at seemingly low debt thresholds. Third, domestic debt (which is often larger than the monetary base in the run-up to high inflation) has largely been ignored in the inflation literature. Last, the view that domestic residents are junior to external creditors does not find broad support.