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Notes to myself, possibly of interest to others.
-- Bill Northlich

Friday, March 12, 2010

Krugman: Low growth->high debt? (v. High debt->low growth)

What I think I’m seeing [in some new Reinhart/Rogoff papers], although I haven’t tested this carefully, is that the causal relationship largely runs from growth to debt rather than the other way around. That is, it’s not so much that bad things happen to growth when debt is high, it’s that bad things happen to debt when growth is low.
---Krugman, 3/12

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