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Private debt and the Anglo-Liberal Growth Model

Barnes, Lucy (2015) Private debt and the Anglo-Liberal Growth Model. Government and Opposition, 51 (4). pp. 529-552. ISSN 0017-257X. (doi:10.1017/gov.2015.17) (KAR id:45507)

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Was there really a debt-fueled 'liberal growth model' preceding the 2008 financial crisis? The accepted narrative about the pre-crisis boom is that some liberal countries relied on domestic consumption to fuel economic growth, and on household debt to fuel this consumption. In this, they contrasted with coordinated economies. While eventually unsustainable, the growth strategy was politically necessary, to maintain middle class living standards in the context of increasing income inequality. In this article, I take these contentions to the data. Economic evidence from 1995-2007, and political data from the Manifesto Project Database undermine this received wisdom: while household debt increased in the liberal countries, it does not differentiate this particular growth model. Further, there is no evidence that politicians in liberal countries advocate different economic policies, including surrounding borrowing, to claim credit and stay in power. Differences in the importance of finance across countries, however, suggest a more elite-driven divergence.

Item Type: Article
DOI/Identification number: 10.1017/gov.2015.17
Subjects: H Social Sciences > HC Economic History and Conditions
J Political Science > JN Political institutions and public administration (Europe)
Divisions: Divisions > Division of Human and Social Sciences > School of Politics and International Relations
Depositing User: Lucy Barnes
Date Deposited: 25 Nov 2014 13:01 UTC
Last Modified: 16 Feb 2021 13:20 UTC
Resource URI: (The current URI for this page, for reference purposes)
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