TY - JOUR AU - Friedman, Benjamin M TI - New Directions in the Relationship Between Public and Private Debt JF - National Bureau of Economic Research Working Paper Series VL - No. 2186 PY - 1987 Y2 - March 1987 DO - 10.3386/w2186 UR - http://www.nber.org/papers/w2186 L1 - http://www.nber.org/papers/w2186.pdf N1 - Author contact info: Benjamin M. Friedman Department of Economics Littauer Center 127 Harvard University Cambridge, MA 02138 Tel: 617/495-4246 Fax: 617/495-7730 E-Mail: bfriedman@harvard.edu AB - Until the 1980s the outstanding indebtedness of government and private-sector borrowers in the United States exhibited sufficient negative covariation that total outstanding debt remained steady relative to nonfinancial economic activity. Three hypotheses -- one based on lenders' behavior, one on borrowers? behavior, and one on credit market institutional arrangements -- provide potential explanations for this phenomenon. Since 1980 the U.S. debt markets have departed from these previously prevailing patterns, however, as both government and private borrowing have risen sharply. ER -