A PhD economics student has debunked the most influential study which has been used to promote austerity worldwide
Does High Public Debt Stifle Economic Growth? New study refutes Reinhart and Rogoff analysis that underpins austerity policy around the world; shows no relation between debt and lack of growth
In capitals, both political and economic, across Europe, across North America, really, across the world, there's been an assumption based on a study done by two eminent Harvard professors, economists Carmen Reinhart and Kenneth Rogoff, which presented in 2010 their conclusions that 90 percent debt-to-GDP ratio means a collapse in growth. It's that conclusion that leads to policies like austerity, which says even in times of recession, debt's more dangerous than high unemployment. Now joining us to talk about their conclusions, because they've reached quite different conclusions about the same data, is, from the PERI institute, first of all, Thomas Herndon. He's a doctoral student in economics at the University of Massachusetts Amherst. His research includes political economy and finance. And he coauthored a paper: Does High Public Debt Consistently Stifle Economic Growth?, which is a critique of Reinhart and Rogoff. And with him is Michael Ash. Michael is a professor of economics and public policy at the University of Massachusetts Amherst. His research focuses on inequality and well-being in the United States. And he teaches graduate economics at UMass Amherst.