PK wrote the following in response to a disparaging open letter by Reinhart and Rogoff:
Reinhart And Rogoff Are Not HappyThis could go on forever, and both they and I have other things to do. So let me just state — clearly, I hope — where their analytical sin lies.
To some extent it lies in the downplaying of causality issues — of whether high debt causes slow growth, slow growth causes high debt, or both high debt and slow growth are the result of third factors (as was the case in demobilizing postwar America, which they highlighted in their original paper).
Read the rest from the NYT