6  Periods of negative interest rates were prevalent between 1945 and 1980, and more recently since 2008. Reinhart and Sbrancia (2011) find that real interest rates were negative roughly half of the time between 1945 and 1980. Annual liquidation of debt via negative real interest rates amounted to 3-4% of GDP per annum in the US and the UK.
7  There is a very long literature that establishes the close link between public deficits and inflation, see Sargent and Wallace (1981), Sims (1994), Woodford (1994, 2001), and Catao and Teronnes (2003). For a discussion of fiscal deficits and hyperinflation, see Sargent (1982) and Dornbusch and Fischer (1986).