Proponents of austerity have repeatedly cited this paper (pdf) by economists Carmen Reinhart and Kenneth Rogoff, which found slowed growth among countries with high debt-to-GDP ratios, to make the case for cuts in government spending. Mike Konczal highlights a new study that casts some serious doubts on the strength of the Reinhart-Rogoff argument:
In a new paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadsheet. This allowed Herndon et al. to see how how Reinhart and Rogoff’s data was constructed.
They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second…
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