What was the scandal surrounding the Reinhart and Rogoff paper?

What was the scandal surrounding the Reinhart and Rogoff paper?

In 2013, academic critics accused Reinhart and Rogoff of employing methodology that suffered from 3 major errors; they asserted that the underlying data did not support the authors’ conclusions.

What did the research of Rogoff and Reinhart show about the effects of a high debt GDP ratio?

The Reinhart-Rogoff research is best known for its result that, across a broad range of countries and historical periods, economic growth declines dramatically when a country’s level of public debt exceeds 90% of gross domestic product.

What was Rogoff’s conclusion regarding debt?

Reinhart, Rogoff, and Rebuttals “Growth in a Time of Debt” has been widely cited in the policy world for its conclusion that gross debt above 90 percent of gross domestic product (GDP) is associated with lower economic growth. “Growth in a Time of Debt” argues that episodes of high debt tend to last a long time.

Does high public debt consistently stifle economic growth critique of Reinhart and Rogo?

A critique of Reinhart and Rogoff. The relationship between public debt and GDP growth varies significantly by period and country. Our overall evidence refutes RR’s claim that public debt/GDP ratios above 90% consistently reduce a country’s GDP growth.

Why is Carmen Reinhart famous?

Reinhart’s areas of expertise are in international finance, and macroeconomics. Her work has helped to inform the understanding of financial crises in both advanced economies and emerging markets. She has published extensively on capital flows, exchange rate policy, banking and sovereign debt crises, and contagion.

What is the relationship between public debt and economic growth?

High public debt can negatively affect capital stock accumulation and economic growth via heightened long-term interest rates, higher distortionary tax rates, inflation, and a general constraint on countercyclical fiscal policies, which may lead to increased volatility and lower growth rates.

What happens when debt-to-GDP ratio gets too high?

The higher the debt-to-GDP ratio, the less likely the country will pay back its debt and the higher its risk of default, which could cause a financial panic in the domestic and international markets.

Does high public debt consistently stifle economic growth summary?

The relationship between public debt and GDP growth varies significantly by period and country. Our overall evidence refutes RR’s claim that public debt/GDP ratios above 90% consistently reduce a country’s GDP growth.

Is Stiglitz a Keynesian?

Joseph Stiglitz is an American New Keynesian economist and winner of the 2001 Nobel Memorial Prize in Economics for his research on information asymmetry. During the Clinton administration, Stiglitz was the chair of the President’s Council of Economic Advisers, (CEA.)

What did James Tobin do?

James Tobin was a Neo-Keynesian economist who studied the relationships between the financial market and macroeconomics. Tobin was best known for his development of portfolio selection theory and his proposal to tax currency exchange transactions.

What are the disadvantages of public debt?

The four main consequences are:

• Lower national savings and income.
• Higher interest payments, leading to large tax hikes and spending cuts.
• Decreased ability to respond to problems.
• Greater risk of a fiscal crisis.

Is there a relationship between GDP and debt?

We also find evidence that the annual change of the public debt ratio and the budget deficit- to-GDP ratio are negatively and linearly associated with per-capita GDP growth. Overall, a robust conclusion of our paper is that above a 90-100% of GDP threshold, public debt is, on average, harmful for growth in our sample.