Many followers of this blog have probably already heard about the paper co-authored by frequent D&S author and UMass-Amherst econ professor and director of the Political Economy Research Institute Bob Pollin (the other co-authors were UMass doctoral student Thomas Herndon and UMass econ prof Michael Ash--call these authors "HAP") that found errors in an influential paper by Kenneth Rogoff and Carmen Reinhart (call them "RR"). The HAP paper started making a big splash on the Internets on Tuesday; I read about it in this piece in the New York Times yesterday morning. I later read Yves Smith's more trustworthy account of the flap at Naked Capitalism.
The RR paper was the basis of the claim that the threshold of a country's debt-to-GDP ratio when things get really bad--growth goes negative--is 90% (when debt is 90% of GDP); this was cited by deficit-hawks, including Paul Ryan, in favor of austerity policies. HAP raise a number of problems with the paper, including a "coding error" in Excel, that they say undermines the findings. It's all very juicy. Here's a summary of the flap from Ron Baiman of the Chicago Political Economy Group:
Great work Bob and colleagues!
Ron
The blog post from Dean Baker from 2010 that Ron links to is a good read--he fumes a bit about a glowing piece on RR's research in the New York Times (I noticed that their piece from Tuesday recycles the same photo from the earlier piece), and takes RR to task for not sharing their data so that other economists might try to replicate their results: "Mr Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers."RR have since responded to the paper, first briefly (here), and today at more length (here).Krugman has done several blog posts about the controversy: here (his initial post on the flap), here (his response to RR's response to HAP), here ("further thoughts"), and here (making the useful point that pudits citing RR share some of the blame).Dean Baker has a great piece in the Guardian whose title gets right to the point: How Much Unemployment did Reinhart and Rogoff's Arithmetic Mistake Cause?Which is related to something I thought when I looked at the front page of today's New York Times, which included a piece entitled More Children in Greece Start to Go Hungry. This too is on RR--not just their mistake, but their own advocacy of austerity (e.g., as Yves Smith pointed out, in Rogoff's op-ed in the Financial Times in July 2010 entitled No Need for a Panicked Fiscal Surge).I wonder whether they will pay any price for their errors. Would a bout of unemployment or hunger be too much to hope for?--Chris Sturr