As Greece Votes, Germans Shouldn't Cheer For An EU Pullout

In recent weeks, economists Carmen Reinhart and Ken Rogoff have taken a lot of heat for a computational error in their paper relating economic growth with debt-to-GDP ratios.

THIS week's Free exchange column discusses the week's hot macroeconomic controversy:In a 2010 paper* Carmen Reinhart, now a professor at Harvard Kennedy School, and Kenneth Rogoff, an economist at Harvard University...argued that GDP growth slows to a snail’s pace once government-debt levels exceed 90% of GDP. The 90% figure quickly became ammunition in political arguments over austerity...[T]his week a new piece of research poured fuel on the fire by calling the 90% finding into question.

The big scandal in the world of economic today is that a new paper attempts to refute the claims — put forth by Carmen Reinhart and Ken Rogoff — that high levels of government debt result in slower growth.

Mike Konczal: Reinhart-Rogoff a Week Later: Why Does This Matter?: Well this is progress. We are seeing distancing by conservative writers on the Reinhart/Rogoff thesis. In Feburary, Douglas Holtz-Eakin wrote:

One of the striking aspects of the furor over Thomas Herndon, Robert Pollin and Michael Ash’s dissection of the considerable flaws in the Carmen Reinhardt and Kenneth Rogoff austerity-justifying paper are the “the earth is still flat” efforts to salvage the theory, which was that high levels of government debt kill growth. Some of the recent sightings: James Hamilton entered the fray and are batted back by Pollin and Ash.

How did Reinhart and Rogoff's now-infamous (ok, in economics circles) Excel error make it through a peer-reviewed journal? Answer: it wasn't a peer-reviewed journal — or at least, the edition their work appeared in wasn't.