Countries with high public debt tend to grow slowly – a correlation often used to justify austerity. This column presents new evidence challenging this view. The authors point out that correlation does not imply causality – it may be that slow growth causes high debt. They argue that policymakers should be wary – the case for cutting debt to boost growth still needs to be made.Read it at Vox.eu
Is high public debt harmful for economic growth?
by Ugo Panizza, Chief of the Debt and Finance Analysis Unit in the Division on Globalization and Development Strategies of UNCTAD and Andrea F Presbitero, Assistant Professor, Department of Economics, Università Politecnica delle Marche