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View Diary: Economics Daily Digest: For austerians, failure is the only option (7 comments)

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  •  Reinhart and Rogoff respond (0+ / 0-)

    Crossposted from MercRising:

    Reinhart and Rogoff have re-done their calculations regarding debt and growth:

    Setting the noise aside, growth in the high-debt category is less than half of what it averages for the low-debt category. [note: this quote just refers to post-war economies, but their longer data series shows the same effect]
    But actually, what this shows is that the noise caused by the details of the model is larger than the effect being studied. Yes, debt reduces growth. But to say that there is a debt "cliff" is indefensible.

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