A colleague, a fellow economist and Lincoln grad, has this morning sent through an article by Dean Baker (also an economist but not a Lincoln grad). He points to a fascinating dispute:
The basic [Reinhart and Rogoff (R&R)] story was simply the result of them getting their own numbers wrong.
After being unable to reproduce R&R’s results with publicly available data, [Herndon, Ash, and Pollin] were able to get the spreadsheets … that R&R had used for their calculations. It turns out that the initial results were driven by simple computational and transcription errors. The most important of these errors was excluding four years of growth data from New Zealand in which it was above the 90% debt-to-GDP threshold.
So, to summarise: the problems with the R&R analysis were caused by:
- New Zealand
You have been warned.