Herndon, Ash, and Pollin criticized an influential paper about the relationship between this quantity and growth for selective data inclusion and errors in weighting and Microsoft Excel. For 10 points each:
[10h] Name this quantity. A 2010 paper by Carmen Reinhart and Kenneth Rogoff posited a critical “threshold” of 0.9 for this quantity, beyond which growth slows significantly.
ANSWER: public debt-to-GDP ratio [prompt on debt]
[10e] Despite those errors, the Reinhart-Rogoff paper was widely cited in support of this kind of policy. This type of policy, common in recessions, involves cutting government spending or increasing taxes.
ANSWER: austerity [or contractionary fiscal policy; or fiscal consolidation]
[10m] A 2012 IMF report found austerity is usually more contractionary than predicted due to underestimating the “fiscal” version of this quantity, which is the ratio of a change in output to a change in government spending.
ANSWER: multiplier [accept fiscal multiplier]
<Albert Nyang, Social Science>