tailieunhanh - Does High Public Debt Consistently Stife Economic Growth? A Critique of Reinhart and Rogoff

To determine why some teachers are more effective than others, Bosshardt and Watts (1990) investigated teacher effects on student learning in high school economics classes using fixed- and random-effects models. The teacher characteristics they examined included college credits in economics, non-credit workshops in economics, years of teaching experience, and the extent of teachers’ past instruction in economics. They found that the most effective teachers were those who had completed more courses in economics. Other significant factors included a proxy for student IQ and school characteristics. . | POLITICAL ECONOMY RESEARCH INSTITUTE PER University of Massachusetts Amherst Does High Public Debt Consistently Stifle Economic Growth A Critique of Reinhart and Rogoff Thomas Herndon Michael Ash and Robert Pollin POLITICAL ECONOMY RESEARCH INSTITUTE April 2013 WORKINCPAPER SERIES Number 322 Does High Public Debt Consistently Stifle Economic Growth A Critique of Reinhart and Rogoff Thomas Herndon Michael Ash Robert Pollin April 15 2013 JEL CODES E60 E62 E65 Abstract We replicate Reinhart and Rogoff 2010a and 2010b and find that coding errors selective exclusion of available data and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. Our finding is that when properly calculated the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually percent not percent as published in Reinhart and Rogoff. That is contrary to RR average GDP growth at public debt GDP ratios over 90 percent is not dramatically different than when debt GDP ratios are lower. We also show how the relationship between public debt and GDP growth varies significantly by time period and country. Overall the evidence we review contradicts Reinhart and Rogoff s claim to have identified an important stylized fact that public debt loads greater than 90 percent of GDP consistently reduce GDP growth. 1 Introduction In Growth in Time of Debt Reinhart and Rogoff hereafter RR 2010a and 2010b propose a set of stylized facts concerning the relationship between public debt and GDP growth. RR s main result is that whereas the link between growth and debt seems relatively weak Ash is corresponding author mash@. Affiliations at University of Massachusetts Amherst Herndon Department of Economics Ash Department of Economics and Center for Public Policy and Administration and Pollin Department of .