Much loved by the IPA and Mr Rabid and Hockey etc..In 2010, the Harvard University economics professors Carmen Reinhart and Kenneth Rogoff published a paper in the American Economic Review, “Growth in a Time of Debt,” that spoke to the world’s biggest policy question: should we cut public spending to control the deficit or use the state to rekindle economic growth? This paper subsequently served as an important intellectual bulwark in support of austerity policies in the United States and Europe. The claim that deificit spending, by stimulating growth, will eventually return good revenues to government coffers was opposed by Reinhart and Rogoff who favour reducing the size of govt spending, cutting welfare etc. The assumptions, methodology and outcomes claimed by these authors in this paper have been proven problematic and the claims they make for austerity leading to growth are simply wrong. Here is a very comprehensive rebuke by Ash and Pollin ..hard reading but it proves tat the pro-austerity case is based on some very bad research and methodology. peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf
Posted on: Sun, 02 Feb 2014 07:32:24 +0000
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