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The 'other half' of the public debt-economic growth relationship: A note on Reinhart and Rogoff

Dafermos, Yannis

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Abstract

Reinhart/Rogoff (2010) and Reinhart et al. (2012) document a negative relationship between public debt and economic growth. However, by classifying the observations of their data set into public debt categories and identifying public debt overhang episodes, they focus only on 'one half' of the public debt–economic growth relationship: the growth-reducing effects of high public debt. This note classifies the observations of their data set into economic growth categories and identifies low-growth episodes. In so doing, it presents the 'other half' of the public debt–economic growth relationship: the debt-increasing effects of low growth. It is argued that the presentation of 'both halves' is essential for a more fruitful research agenda and policy debate.

Citation

Dafermos, Y. (2015). The 'other half' of the public debt-economic growth relationship: A note on Reinhart and Rogoff. European Journal of Economics and Economic Policies: Intervention, 12(1), 20-28. https://doi.org/10.4337/ejeep.2015.01.03

Journal Article Type Article
Publication Date Apr 1, 2015
Journal European Journal of Economics and Economic Policies: Intervention
Print ISSN 2052-7764
Publisher Edward Elgar Publishing
Peer Reviewed Not Peer Reviewed
Volume 12
Issue 1
Pages 20-28
DOI https://doi.org/10.4337/ejeep.2015.01.03
Keywords public debt, economic growth
Public URL https://uwe-repository.worktribe.com/output/836378
Publisher URL http://dx.doi.org/10.4337/ejeep.2015.01.03
Additional Information Additional Information : © [Y. Dafermos, 2015]. The definitive, peer reviewed and edited version of this article is published in [European Journal of Economics and Economic Policies: Intervention, 12, 1, pp.20-28, 2015]

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