The end of hegemony


"Funding the Great War and the Beginning of the End for British Hegemony" Fee Download
CEPR Discussion Paper No. DP13848
MARTIN ELLISON, University of Oxford
THOMAS J. SARGENT, New York University (NYU) - Department of Economics, Leonard N. Stern School of Business, National Bureau of Economic Research (NBER)
Email: thomas.sargent@nyu.edu
ANDREW SCOTT, London Business School - Department of Economics, Centre for Economic Policy Research (CEPR)
Email: ascott@london.edu
Britain was the richest country in the world at the outbreak of the Great War, benefitting from all the resources of an industrialised country and a large empire. Funding the war contributed to the beginning of the end for British hegemony. Financiers in London extracted a high price for lending their money to the government to pay for the supplies and munitions needed to win the war. The US extracted a similarly high price for lending to Britain during the war. Russia never paid its war debts to Britain; France, Italy and Belgium got off lightly; but for a long time the US insisted on Britain repaying in full.

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