Growth in a Time of Debt


Rogoff, Kenneth S, and Carmen M Reinhart. 2010. “Growth in a Time of Debt.” American Economic Review 100 (2): 573-578. Copy at
Download Paper318 KB


In this paper, we exploit a new multi-country historical dataset on public (government) debt to search for a systemic relationship between high public debt levels, growth and inflation. Our main result is that whereas the link between growth and debt seems relatively weak at “normal” debt levels, median growth rates for countries with public debt over roughly 90 percent of GDP are about one percent lower than otherwise; average (mean) growth rates are several percent lower. Surprisingly, the relationship between public debt and growth is remarkably similar across emerging markets and advanced economies. This is not the case for inflation. We find no systematic relationship between high debt levels and inflation for advanced economies as a group (albeit with individual country exceptions including the United States). By contrast, in emerging market countries, high public debt levels coincide with higher inflation.

DASH Repository

Last updated on 10/01/2013