Controversy over debt and growth

A little while ago, we discussed whether there is a unanimous threshold of the debt-to-GDP ratio that would consistently create problems for economies. (Our preliminary conclusion was that there was no unanimously agreed-upon threshold.)

Two recent studies now follow up on this issue. First, Reinhart and Rogoff suggest in their “main result [...] that [...] median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.”

Second, however, a re-analysis of their data by Herndon, Ash, and Pollin suggests that the above conclusion has some problems and cannot be sustained by the data.

This is an interesting exchange worth following if you are interested in the implications of high debt-to-GDP ratios - a phenomenon that has not been irrelevant in the past few years.

Edit: why is this relevant? Not just for theoretical concerns, but also for the debate about the merit of austerity policies. See two takes here:
1. Is the evidence for austerity based on an Excel spreadsheet error? (Washington Post - Wonkblog)
and 
2. An update on the Reinhart and Rogoff critique and some observations (Tyler Cowen's blog).