Mark Gongloff — 2 More [UMKC] Grad Students Claim To Find Another Flaw In Reinhart-Rogoff Research

Woo hoo!

First, University of Massachusetts-Amherst grad student Thomas Herndon shot holes in their influential research paper, "Growth In A Time Of Debt," by pointing out several mistakes and omissions the Harvard economists had made. Now, two PhD students at the University of Missouri-Kansas City have a new paper that they say finds another flaw in that same research.

The students argue that Reinhart and Rogoff's paper leaned too heavily on data from one country, Japan, leading to all sorts of bad conclusions about the relationship between government debt and economic growth.

"The argument that high ratios of government debt-to-GDP cause low growth remains plagued by misconceptions, at least for nations which issue their own currency," wrote the UMKC students, Matthew Berg and Brian Hartley. They used the same data that Herndon used, correcting for Reinhart and Rogoff's earlier errors and omissions.

Berg and Hartley argued that, once you adjust for the outsize influence of Japan on the data, there is no evidence that high debt causes slow growth, as Reinhart and Rogoff strongly suggested in their original paper and in subsequent influential op-ed pieces. In fact, there is some evidence that the chain of events may work in the other direction, with slow growth leading to higher debt, Berg and Hartley wrote.

The Huffington Post
2 More [UMKC] Grad Students Claim To Find Another Flaw In Reinhart-Rogoff Research
Mark Gongloff