Mankiw on debt and growth

Greg Mankiw has posted five observations “on the coding error found in one of the Reinhart-Rogoff papers”. The most important, in my opinion, is #3:

I believe that high levels of debt and deficits are a negative for the economy in the long run.  My views on this issue have not changed substantially since I wrote about it with Larry Ball almost twenty years ago.

Mistakes“, Greg Mankiw’s Blog, 23 April 2013.

Harvard professor Greg Mankiw is author of a best-selling economic principles text. He apparently believes that high debt eventually causes low growth. I wonder how he defines “high”, since he “never thought there was a magic threshold for the debt-to-GDP ratio above which all hell breaks loose”.



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