Economists Carmen Reinhart and Kenneth Rogoff of Harvard University have issued an erratum to their 2010 paper, “Growth in a Time of Debt.” Their original paper found some evidence of a possible tipping point at which higher debt levels would significantly restrict economic growth, with median growth rates falling from 2.9 percent among countries with debt levels between 60 percent and 90 percent of GDP to 1.5 percent among countries with debt levels greater
Today, the Peter G. Peterson Foundation held its third annual Fiscal Summit, assembling a number of prominent current and former lawmakers, experts, and commentators to discuss the current state and future of our economy and the nation's finances. The discussion was kicked off by Juan Enriquez, co-founder of Synthetic Genomics Inc., a biotechnology company.
Regular readers of The Bottom Line are probably familiar with our goal of putting the debt on a downward path as a share of the economy over the long term. Much of the conversation on fiscal policy recently has centered around arguments against "austerity," but smart deficit reduction is different.
As lawmakers gear up to debate immigration reform in the weeks and months ahead, it will likely coincide with the ongoing budget debate in Washington, meaning that there will be heightened attention paid to the legislation's economic impact and budgetary impact. While CBO has not yet analyzed the immigration legislation recently introduced in the Senate, they have released a report outlining the methods used to estimate the effects of immigration reform legislation in 2006 that illustrates how an immigration bill may be scored.
Harvard professors Carmen Reinhart and Kenneth Rogoff’s (R&R) 2010 paper, Growth in a Time of Debt, has been all over the news in the past few weeks due to a critique of their methodology by a team of University of Massachusetts-Amherst economists.
The Congressional Budget Office has been busy on its blog lately, posting both snapshots of federal programs and also publishing responses to questions they have received from Members of Congress at hearings. Their latest post from director Doug Elmendorf is the latter variety, showing the sensitivity of budget projections to changes in interest rates.
Despite a growing chorus of debt deniers, most economics continue to agree that putting in place a long-term plan to responsibly address our growing debt would help promote long-term economic growth and stability.
The Atlantic held its 2013 Economy Summit yesterday, featuring more than twenty-four speakers on tax reform, the future of entitlement programs, and the role of debt and deficits in current policymaking. Experts from a wide range of different perspectives discussed how to deal with our debt and boost the economic recovery, arguably the two greatest challenges for policymakers today.
Last Friday, the CBO released a report showing how much the business cycle has affected budget deficits since 1960. The report shows the effect that automatic stabilizers -- features of the budget that tend to automatically push up/down spending and revenue based on cyclical economic effects -- have had and what the budget would look like assuming that the economy is operating exactly at its potential.