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.
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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