- Michael Hüther ·
- IW-Policy Paper No. 3 ·
- 26 March 2019
10 years of debt brake - a concept with a future?
The introduction of the German debt brake 10 years ago was justified from a historical perspective. Compared to the early 1960s, the debt ratio had more than quadrupled from 20 to 80 percent despite consolidation efforts. In addition, due to government bonds yields well above the GDP growth rate, it was assumed that public borrowing would result in an intergenerational redistribution at the expense of future generations.