Growth in a Time of Debt

Growth in a Time of Debt, also known by its authors' names as Reinhart–Rogoff, is an economics paper by American economists Carmen Reinhart and Kenneth Rogoff published in a non peer-reviewed issue of the American Economic Review in 2010. Politicians, commentators, and activists widely cited the paper in political debates over the effectiveness of austerity in fiscal policy for debt-burdened economies. The paper argues that when "gross external debt reaches 60 percent of GDP", a country's annual growth declined by two percent, and "for levels of external debt in excess of 90 percent" GDP growth was "roughly cut in half." Appearing in the aftermath of the financial crisis of 2007–2008, the evidence for the 90%-debt threshold hypothesis provided support for pro-austerity policies.

In 2013, academic critics accused Reinhart and Rogoff of employing methodology that suffered from 3 major errors; they asserted that the underlying data did not support the authors' conclusions. These critics held that the Reinhart-Rogoff paper had led to unjustified adoption of austerity policies for countries with various levels of public debt.

Further papers by Rogoff and Reinhart, and the International Monetary Fund, which were not found to contain similar errors, reached conclusions similar to the initial paper, though with much lower impact on GDP growth. The threshold hypothesis retains adherents as well as critics, who suggest that the thresholds in the relation between public debt and economic growth lack robustness, so a consensus on the 90%-threshold hypothesis in the relation between public debt and economic growth has been elusive.

In their critique of Reinhart and Rogoff's paper, University of Massachusetts Amherst economists Thomas Herndon, Michael Ash, and Robert Pollin pointed out that "Growth in a Time of Debt" was influential on the United States Republican Party's budget proposal "The Path to Prosperity" (commonly referred to as the "Paul Ryan budget"):

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