Debt and growth revisited..does high debt really slow growth?

http://qz.com/88781/after-crunching-reinhart-and-rogoffs-data-weve-concluded-that-high-debt-does-not-cause-low-growth/

An interesting re evaluation of the longterm effects of debt.

Here is the bottom line. Based on economic theory, it would be surprising indeed if high levels of national debt didn’t have at least some slow, corrosive negative effect on economic growth. And we still worry about the effects of debt. But the two of us could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.

Worth a read..here is their takeaway graph


image

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2 thoughts on “Debt and growth revisited..does high debt really slow growth?

  1. Ursula Bond

    What is the correlation co-efficient for that graph? AS a biologist, I doubt there is any correlation between X and Y.

    Reply

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