Managing the UK national debt 1694-2018

Ellison, Martin and Scott, A (2020) Managing the UK national debt 1694-2018. American Economic Journal: Macroeconomics, 12 (3). pp. 227-257. ISSN 1945-7707

Abstract

We examine UK debt management using a new monthly dataset on the quantity and market price of every individual bond issued by the government since 1694. Our bond-by-bond dataset identifies variations in the market value of debt and so captures investors’ one period holding returns, the cost of debt management in the government’s intertemporal budget constraint. We find a substantial cost advantage in favour of issuing short bonds, even when considering some of the operational risks implied by cash flows and gross redemptions.