No holiday from austerity

High debt need not impede growth, but a European recovery has to take hold before Ireland can relax its correction of the government deficit, writes John Fitzgerald.

27th April, 2013
An anti-austerity protest of red cards is staged outside City Hall in central Dublin earlier this month. Photo: Photocall Ireland

Unbelievers can cheer when a prophet is dethroned, but the faithful may not even notice. In a recent paper, two prominent economists, Reinhart and Rogoff, claimed that high debt inevitably has a serious effect on growth.

The fact that subsequent analysis has shown that the evidence for this "finding" was unsatisfactory is a serious embarrassment to the authors. They are both well respected economists with a large body of valuable work to their credit.


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