Many citizens have been increasingly using cards to make payments during the coronavirus pandemic. “According to a representative Bundesbank survey in 2020, the importance of cashless payment methods, especially cards, in everyday expenditures has been growing considerably,” said Bundesbank Executive Board member Burkhard Balz at the unveiling of the results.

Financial repression is intended to help the government deleverage over time, for example following crises, by artificially lowering the yield on government bonds. However, its impact on the deb-to-GDP ratio also depends on how it affects the economy as a whole, as financial repression also influences private investment and saving decisions. In view of these macroeconomic interrelationships, financial repression can lead to a net rise in the government debt-to-GDP ratio. A new study suggests that this is what happened in the United States following the Second World War.