Month: June 2013

Recently, we have seen a number of explorations of the timing of growth around episodes of high debt as a way to discern the likely direction of causality in that relationship.  This is important, because we doobserve that there is a negative correlation between contemporaneous debt and growth. For instance, this is true when using the corrected data from Reinhart and Rogoff,…

Recent work by my colleagues at UMass Thomas Herndon, Michael Ash and Robert Pollin (2013)—hereafter HAP—has demonstrated that in contrast to the apparent results in Reinhart and Rogoff (2010), there is no real discontinuity or “tipping point” around 90 percent of debt-to-GDP ratio. In their response, Reinhart and Rogoff—hereafter RR—admit to the arithmetic mistakes, but argue that…