REINHART AND ROGOFF: 'Full Stop,' We Made A Microsoft Excel Blunder In Our Debt Study, And It Makes A Difference
"This is dramatic stuff. The 90% threshold has taken on a huge role in the public economic/political/pop-culture discourse. And they admit that an Excel error lead to a "notable" change in what you'd get for the average growth rate above this level."
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http://www.businessinsider.com/reinhart-and-rogoff-admit-excel-blunder-2013-4#ixzz2RH3RVKgJ" target="_blank" rel="nofollow noopener noreferrer">
http://www.businessinsider.com/reinhart-and-rogoff-admit-excel-blunder-2013-4#ixzz2RH3RVKgJ
" ...Put simply, the counter argument is that Reinhart and Rogoff have confused cause and effect: countries have high debt levels because they have slow growth rather than having slow growth because they are heavily indebted.
This seems logical. Britain's debt to GDP ratio has more than doubled in the past five years and is now close to the 90% level. But it was the collapse of the economy in 2008-09 followed by the most tepid of recoveries that blew a hole in the government finances. There is no indication that servicing this debt is prohibitively expensive: indeed, interest rates on government gilts are close to historic lows. As they are in other countries - such as the US and Germany - that are running debt to GDP ratios of a similar size. The message is a simple one: get economies moving and the debt will look after itself..."
http://www.guardian.co.uk/politics/2013/apr/21/george-osborne-imf-downgrade-inspection
"As the chancellor's "success" criteria - triple A ratings, IMF blessing and Ken Rogoff's figures ('Stonewall' Osborne falls victim to friendly fire, 22 April) - have fallen like dominoes, the ideological nature of his austerity strategy is confirmed. At the time of the 2008 crisis the problem with the UK economy was not public sector (government) debt, which at 52% GDP was less than most other developed countries including Germany. The problem was private sector debt at 328% of GDP, significantly more than all other countries except Japan. Yet the coalition has persisted in cutting the public sector instead of addressing the private financial sector. Even by David Cameron's criterion of "paying down the debt" his policies are not working. According to the UK Statistics Authority, since he entered office public sector net debt has risen from £811.3bn (55.3% of GDP) in June 2010 to £1.11trn (70.7% of GDP) at the end of 2012. Signs are that it will continue to do so.
David Murray
Wallington, Surrey"
http://www.guardian.co.uk/business/2013/apr/22/economic-howlers-of-our-time