Austerity

In a 2010 paper Carmen Reinhart, now a professor at Harvard Kennedy School, and Kenneth Rogoff, an economist at Harvard University, seemed to provide an answer. They argued that GDP growth slows to a snail’s pace once government-debt levels exceed 90% of GDP

Herndon pulled up an Excel spreadsheet containing Reinhart's data and quickly spotted something that looked odd.

"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations.

A. Smith je 20. apr 2013 ob 14:32 izjavil:

Ne, niso. Odkritih je bilo nekaj napak, ki pa ne ovržejo rezultata raziskave.

The controversy does not much affect important parts of Profs Reinhart and Rogoff's work, such as their research on the previously understated risk of default for heavily indebted nations - something that has befallen a large number of countries in the past few hundred years.

The Amherst researchers, in their vicious review, did find some errors in the maths underlying Prof Reinhart and Prof Rogoff's warning about the precipitous decline in economic growth associated with debt ratios of more than 90 per cent. But one cannot read their analysis and then conclude that the case for austerity - and a tough line on debt - is much weakened.

http://www.ft.com/cms/s/0/2df58ce0-a8ba...