What happened to the magic #debt-threshold effect on #GDP growth in the #UK that George Osborne talked about following the #financial crisis and was used to justify #austerity?
In fact we show that Keynesian fiscal deficit spending to spur growth does not necessarily have negative long-run consequences for output growth, so long as it is coupled with credible fiscal policy plan backed by action that will reduce the debt burden back to sustainable levels
We also find no evidence for a universally applicable threshold effect in the relationship between public #debt and economic #growth. You can read our @restatjournal paper on "Is there a #debt-threshold effect on output growth" here: doi.org/10.1162/REST_a…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
With new variants/waves & reimposition of restrictions in some regions, governments around the world are calling for a careful assessment of the effectiveness of the adopted #Covid19#fiscal measures before they embark on further easing or tailoring of measures 2/n
The #Covid19 pandemic led to a sharp tightening of global #financial conditions at the acute phase of the crisis and has inflicted large economic losses across the world (see Figure below) ... 3/n
What are the implications of excess global financial market volatility on economic growth? Are there threshold effects in the relationship between growth & excess global volatility for individual countries? How should we model the nonlinear effects in a multi-country setting? 1/n
The #Covid19#pandemic has been a shock like no other, initiating simultaneous demand and supply disruptions. In addition, it led to a sharp tightening in global #financial market conditions during the first quarter of 2020. 3/n
Key challenges with the empirical #economic analysis of #Covid19 include the following: how to identify the shock, how to account for its non-linear effects, & how to quantify its effects while accounting for spillovers, common global factors, network effects and uncertainty. 2/n
We contribute to the literature by addressing these issues in a coherent multi-country framework. We offer an identification strategy for the #Covid19 shock considering that a synthetic control method cannot be applied in the context of a global #pandemic. 3/n
Looking forward to chatting with potential @Cambridge_Uni economics candidates later today and answering any questions you have about #economics at #Cambridge (one of the oldest economics faculties in the world) or the wonderful @Kings_College.
It has been the home of many great economists, such as Richard Kahn, Nicholas Kaldor, John Maynard Keynes, Arthur Cecil Pigou, Joan Robinson, Richard Stone and Oliver Hart to name a few.
Among @Cambridge_Uni Colleges, at King's we currently have one of the largest number of #economics Fellows, including my amazing colleagues Aytek Erdil, @elisafaraglia, @giannitsarou & Hamid Sabourian (with super interesting research interests from macroeconomics to game theory).
Like my friend Thomas, I keep getting sent articles about our teaching @Cambridge_Uni next academic year and people emailing to ask about the articles, please don’t jump to conclusions! 1/n