Mark G. Sheppard

A 28-year-old UMass graduate student got a homework assignment to reproduce a famous economics paper, couldn't make the numbers match, and found a spreadsheet mistake in a study that politicians had used to argue for budget cuts. His name is Thomas Herndon. In 2010, two Harvard economists, Carmen Reinhart and Kenneth Rogoff, published a short paper called Growth in a Time of Debt. Its headline finding: once a country's public debt goes above 90% of its economy, growth falls off a cliff. In their numbers, average growth for that group was minus 0.1%. It came out right after the 2008 financial crisis, and it spread fast. In the US, the Paul Ryan budget cited it as its only evidence on what high debt does to growth. In Europe, an EU commissioner pointed to the research in a speech. In Britain, George Osborne cited the authors by name. Herndon was a PhD student at the University of Massachusetts Amherst, taking a class called Econ 753: Applied Econometrics. The big assignment was to pick a well-known paper and replicate it. He picked this one. He couldn't get the same results. He asked the authors for their spreadsheet, and they sent it. When he spotted the problem, he called his girlfriend over to make sure he wasn't seeing things. He wasn't. > One formula stopped five rows short > That quietly left out five countries: Australia, Austria, Belgium, Canada and Denmark > Some available years of data for other countries weren't included > The way the averages were weighted let a single bad year in one country count as much as decades in another Herndon and his professors, Michael Ash and Robert Pollin, published the critique in April 2013. Fixing the problems, average growth for the high-debt countries came out to 2.2%, not minus 0.1%. Reinhart and Rogoff publicly admitted the spreadsheet error. They disputed the other criticisms and defended their broader view. Economists still argue about debt and growth today. But the formula was wrong, and for about three years nobody had publicly caught it. A student doing homework did. Most people assume famous research has been checked many times. Often the first person to really check it is someone with nothing to lose and an assignment due. Have you ever found a mistake in your boss's spreadsheet and kept quiet?

Harvard PhD students are on strike, postdocs and lecturers will probably join next week. Harvard PhD students obviously enjoy great privilege, but this privilege is not reflected in our wages. Here is a comparison to my "alma mater". There is room to move.

more blue economist.com/interactive/20…

Built my dashboard for the evening ... Starting from my model predictions (based on polls) as priors, it will update and rerun the model as county level returns start coming in, based on a factor-model for polling error. Also reports updated betting market numbers all under one roof. [Did a simulation of the 2022 evening, seemed to work pretty well.] I'll post some updates over the course of the evening, provided it doesn't crash out.

Students in my elections class had to turn in forecasts for the midterms. Throughout the first 8 weeks of the semester, we learned how to build models and make forecasts for all House and Senate races in this year's midterms elections. Here's how they turned out 1/n

1. More billionaires are associated with less poverty. 2. Increasing billionaires per capita by ten fold lowers poverty by 43 percentage points. 3. Sweden has more billionaires per 10M people than the U.S. (34 vs 30) 4. Correlation is fairly strong (R-squared of 0.6 for two variable cross-section data) 4. Since the graph is only a correlation, what do you think is the cause? 🔗in🧵