by John Aziz, Azizonomics:
Reinhart and Rogoff’s empirical result posited a clear threshold. Reinhart and Rogoff were clear that debt-to-GDP ratio above 90% spelled doom for growth. The actual data is far less clear:
There is some correlation, but that correlation was loose enough to suggest that this was just one factor of many, and it never said anything at all about whether high debt caused low growth, or low growth caused high debt, or whether some exogenous factor was causing both. The real questions are all about causation.
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