The most important paper you will read this decade

[mastoidbone]

I urge you to read the full text---and send it to the president at his WH email. I also link the 2nd most important article written this decade.

http://www.economics.harvard.edu/files/faculty/51_Growth_in_Time_Debt_aer.pdf



http://bluelineinv.com/images/Debt_Overhangs_-_Past_and_Present.pdf

We identify the major public debt overhang episodes in the advanced economies since the early 1800s, characterized by public debt to GDP levels exceeding 90% for at least five years. Consistent with Reinhart and Rogoff (2010) and other more recent research, we find that public debt overhang episodes are associated with growth over one percent lower than during other periods. Perhaps the most striking new finding here is the duration of the average debt overhang episode. Among the 26 episodes we identify, 20 lasted more than a decade. Five of the six shorter episodes were immediately after World Wars I and II. Across all 26 cases, the average duration in years is about 23 years. The long duration belies the view that the correlation is caused mainly by debt buildups during business cycle recessions. The long duration also implies that cumulative shortfall in output from debt overhang is potentially massive. We find that growth effects are significant even in the many episodes where debtor countries were able to secure continual access to capital markets at relatively low real interest rates. That is, growth-reducing effects of high public debt are apparently not transmitted exclusively through high real interest rates.


Here is intro the the 2010 work that is so important and ignored by DC as well.

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.1
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.

[mastoidbone]

What is best way to reduce that debt?
Glad you asked---because the research is clear on this. From bastion of Right wing ideology---Harvard.

http://www.economics.harvard.edu/faculty/alesina/files/Large%2Bchanges%2Bin%2Bfiscal%2Bpolicy_October_200 9.pdf

We examine the evidence on episodes of large stances in fiscal policy,
both in cases of fiscal stimuli and in that of fiscal adjustments in OECD
countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more
likely to increase growth than those based upon spending increases. As for
fiscal adjustments those based upon spending cuts and no tax increases are
more likely to reduce deficits and debt over GDP ratios than those based upon
tax increases. In addition, adjustments on the spending side rather than on
the tax side are less likely to create recessions. We confirm these results with
simple regression analysis

[Emmitto]

Dissappointing that the most important paper of the whole decade is already out. Is there a list of all the others? I want to see all the less important future topics.

[ThePlayer]

Thank you Mastoid.

If our 'leadership' didn't scare me enough...

[mastoidbone]

well actually i listed the 3 most important---though one is from 2009/2010.....
if interested I can give you a top 10...just PM me.

[Emmitto]

well actually i listed the 3 most important---though one is from 2009/2010.....
if interested I can give you a top 10...just PM me.

Oh, last decade. Well I suppose that's not as hyperbolic as I presumed. Still just a bit subjective. I was just poking at you a little. Sorry for the interruption.

[Minister_of_Information]

http://farm9.staticflickr.com/8528/8511202455_76c4c27ca6.jpg

[ncgatr1]

Very good read, it seems like there are a lot of people in this Administration whom feel that there is enough wealth to go after to keep us from heading down Greece's path. This kind of thinking is keeping this Country from a real recovery.

[mastoidbone]

I know
:)

but if we are to leave economics...a favorite of mine.

http://www.nature.com/nature/journal/v489/n7414/full/nature11247.html
The human genome encodes the blueprint of life, but the function of the vast majority of its nearly three billion bases is unknown. The Encyclopedia of DNA Elements (ENCODE) project has systematically mapped regions of transcription, transcription factor association, chromatin structure and histone modification. These data enabled us to assign biochemical functions for 80% of the genome, in particular outside of the well-studied protein-coding regions. Many discovered candidate regulatory elements are physically associated with one another and with expressed genes, providing new insights into the mechanisms of gene regulation. The newly identified elements also show a statistical correspondence to sequence variants linked to human disease, and can thereby guide interpretation of this variation. Overall, the project provides new insights into the organization and regulation of our genes and genome, and is an expansive resource of functional annotations for biomedical research.

[bluelang]

Identify a solution that doesn't make the problem worse.


or stfu. :P