UMass economists named to leading global thinkers list
AMHERST — Three University of Massachusetts economists who found serious errors in a key study that lawmakers around the globe used as a cornerstone of austerity policies have been named to Foreign Policy magazine’s list of 100 Leading Global Thinkers of 2013.
Graduate student Thomas Herndon and professors Michael Ash and Robert Pollin were named to the “Challengers” category of the list, which was published in the November/December issue of Foreign Policy. The researchers received worldwide acclaim in April after posting a working paper that challenged a study by a pair of Harvard economists that had long been held as a reason for implementing austerity cuts in times of slow economic growth.
The UMass working paper examined Carmen Reinhart and Kenneth Rogoff’s 2010 research on the relationship between public debt and GDP growth for advanced economies in the post-World War II period. Reinhart and Rogoff argued that the rate of economic growth for these countries has consistently declined precipitously once the level of government debt exceeds 90 percent of the country’s GDP.
In recent years, Reinhart and Rogoff’s results have been highly influential as support for austerity policies in both Europe and the United States.
However, Herndon, Ash and Pollin found that a series of data errors and unsupportable statistical techniques led to an inaccurate representation of the actual relationship between public debt and GDP growth. They found that when calculated their way, average GDP growth for advanced economies at public debt-to-GDP ratios over 90 percent is not dramatically different than when debt-to-GDP ratios are lower, a fatal flaw that shattered the underpinning of conservative approaches to national debt and federal budgeting.
Since April, Herndon, Ash and Pollin revised their initial working paper, taking into account, among other things, the responses to the working paper by Reinhart and Rogoff. The final version of their paper is scheduled to be published in the Cambridge Journal of Economics.
In the weeks and months following the report’s initial publication, its results received nearly as much global news coverage for how they were discovered as they did for the impact they had on global economic policy discussion.
Herndon, the graduate student, had been issued a term paper assignment for an applied econometrics class taught by Ash, Pollin and Arindrajit Dube to replicate the findings of a well-known study using the study’s data set. After selecting the Reinhart-Rogoff report, Herndon found that after numerous attempts he was unable to replicate its findings using the data that was publicly available, so Ash and Pollin recommended that he contact Reinhart and Rogoff directly to request their original data spreadsheet. They sent Herndon the spreadsheet, and almost immediately he saw the errors that they had made. Pollin and Ash corroborated Herndon’s discovery, and together they authored the paper that would start a global political firestorm.
Numerous national and international television and radio programs interviewed the researchers.