Public debt, GDP growth, and austerity: why Reinhart and Rogoff are wrong

Since the beginning of the financial crisis in 2008 austerity has been the cornerstone of economic policies in the U.S. and Europe. In 2010, these policies were given a significant boost by the publication of research by Harvard University Professors Reinhart and Rogoff, which stated that cutting public spending to control deficits, would help to restart economic growth. Robert Pollin discusses new research which shows that several of Reinhart and Rogoff’s critical findings were incorrect. He argues that after compensating for the mistakes made, the data shows that that the relationship between growth and public debt varies widely over time and between countries, and that countries that are approaching a 90 percent ratio of public debt to GDP may not necessarily be at a danger point for economic growth.