This essay examines Keynes’s views on public debt, taking as its point of departure his 1943 confrontation with Abba Lerner on the issue. It also exhaustively considers the wider intellectual relationship between the two men, as well as Keynes’s other commentaries on public debt in the 1930s and 1940s. The essay concludes that the key issue distinguishing Keynes’s rather more cautious view of feasible and desirable public debt trajectories, vis-à-vis Lerner’s position, is Keynes’s attentiveness to the psychology of the debt markets, which is, in turn, an expression of his sensibility toward theory versus practice.

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