How to escape from the debt trap: Lessons from the past.

Rising  public  debt  everywhere  has  raised  the  question  of  how  to  reduce  debt  again  in  the  future.  High  public  debt  also  seems  to  be  an  impediment  for  the  exit  of  central  banks from ultra-low interest rates and quantitative easing. Historical  precedents  and  proposals  have  included  auster-ity,  haircuts  and  the  generation  of  inflation.  Each  way  has  advantages  and  disadvantages,  including  uncertainty  about  effects  and  side  effects.  We  approach  the  issue  from  an  historical  perspective,  based  on  case  studies  of  prominent  approaches  to  debt  reduction.  Prof. Dr. Thomas Mayer und Prof. Gunther Schnabl analyse debt  reduction through economic austerity in Italy, hyperinfla-tion in Germany after World War I, inflation in Argentina since  the  1980s,  currency  reform  in  Germany  after  WW  II,  and  financial  repression  in  the  United  States  and  the  United Kingdom after WW II. Finally, we discuss Ronald McKinnon's order of economic and financial liberalisation as  well  as  the  Chicago  Plan  combined  with  the  introduc-tion of central bank digital currencies as an option for the future.