Graduate Student Research Revises Economic Advice

Graduate student research ideally develops new analysis and criticism by employing new evidence and/or new methods.

Thomas Herndon, a graduate student in Economics at the University of Massachusetts-Amherst, recently made a finding that has major significance for economic policies worldwide.

Studentresearcher-Herndon

Herndon discovered an error in economic data that seemed to show that austerity measures are necessary when a nation’s debt exceeds 90% of that nation’s GDP.

The statistical data that Herndon critiques was produced by professors Carmen Reinhart and Ken Rogoff and presented in a 2010 paper entitled “Growth in a Time of Debt.” According to the BBC, their paper’s findings indicated that “economic growth slows dramatically when the size of a country’s debt rises above 90% of Gross Domestic Product, the overall size of the economy.”

Reinhart and Rogoff’s data has been used by politicians and policy-makers to argue for massive budget cuts and austerity measures in the United States and in a number of European Union (EU) countries.

Herndon discovered that Reinhart and Rogoff had made a serious miscalculation in averaging GDP growth for nations that have high public debt.

This finding removes one of the main pieces of statistical data that has been used by advocates of austerity measures to support their arguments. Economic historians, European historians, and historians of globalization will be interested in this story.

This case shows the importance of graduate work in questioning established findings critically and in performing original research.

The BBC reports on this story.

Advertisements
This entry was posted in Academic Publishing, European History, European Union, Globalization, Graduate Work in History, Historiography and Social Theory, Information Management, Political Culture. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s