We study three centuries of U.K., U.S. and Dutch fiscal history. When a country is the dominant safe asset supplier, it can issue more debt than what is justified by its future primary surpluses. This pattern holds for the Dutch Republic in the 17th and 18th, the U.K. in the 18th and 19th, and the U...
Keywords:
bond pricing, fiscal policy, term structure, convenience yield, exorbitant privilege
