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Abstract

This paper explores the impact of sovereign debt on the income share of the top one percent in Germany from 1980 to 2019. Central to this study is the classical political economy argument that public debt is largely owned by the wealthy, who receive interest payments on sovereign bonds, while the tax burden of these payments falls on the entire population. Hence, public indebtedness results in a redistribution of income within the country. However, this study argues that bondholders today typically trade government bonds in secondary markets for capital gains rather than holding them until maturity. This paper examines historically and econometrically how these two mechanisms contribute to rising income inequality in Germany and emphasizes the prevalence of capital gains as the main redistributive apparatus.

Publication Type:	Article
Additional Information:	This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Post Keynesian Economics on 11 May 2026, available at: https://doi.org/10.1080/01603477.2026.2664437
Publisher Keywords:	Public debt, top one percent, Germany, interest payments, capital gains, income inequality
Subjects:	D History General and Old World > D History (General) > D839 Post-war History, 1945 on D History General and Old World > D History (General) > D901 Europe (General) D History General and Old World > DD Germany H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance H Social Sciences > HN Social history and conditions. Social problems. Social reform J Political Science > JN Political institutions (Europe)
Departments:	School of Policy & Global Affairs School of Policy & Global Affairs > Department of International Politics
SWORD Depositor:	Symplectic Administrator

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