Much to our surprise, spreadsheet formulae have hit the news! A
student has exposed simple errors in a previously well-respected
economic study.
Back in January 2010, Harvard professors Carmen Rienhart and
Kenneth Rogoff released a paper entitled Growth in a time of
debt1, which concluded:
"Our main finding is that across both advanced
countries and emerging markets, high debt/GDP levels (90 percent
and above) are associated with notably lower growth
outcomes."2
This paper has received a huge amount of publicity and has been
relied on by politicians across the globe as support for
'austerity' economic measures.3
It has made the news because a critique was published by
graduate student Thomas Herndon and co-authors Professors Michael
Ash, and Robert Pollin of the University of Massachusetts. The
Hendon-Ash-Pollin paper outlined three central critiques:
