May 23, 2013
When the stakes are high, it is no surprise that battling political opponents use whatever support they can garner from economists and other researchers. That is what happened when conservative American politicians and European Union officials latched on to the work of two Harvard professors - Carmen Reinhart and Kenneth Rogoff - to justify their support of fiscal austerity. Reinhart and Rogoff published a paper that appeared to show that public-debt levels above 90 percent of GDP significantly impede economic growth. Three economists from the University of Massachusetts at Amherst then did what academics are routinely supposed to do - replicate their colleagues' work and subject it to criticism. Along with a relatively minor spreadsheet error, they identified some methodological choices in the original Reinhart/Rogoff work that threw the robustness of their results into question. Most important, even though debt levels and growth remained negatively correlated, the evidence for a 90 percent threshold was revealed to be quite weak. And, as many have argued, the correlation itself could be the result of low growth leading to high indebtedness, rather than the other way around.
Rodrik, Dani. "Politicians Wrong-Headed on Economic Research." Global Times, May 23, 2013.