Uncharted with Hannah Fry 10. Devil in the Detail
Oct 2, 2023
Thomas Herndon, a student who challenged economic status quo, uncovers errors in a prominent economic paper, questioning the correlation between debt levels and economic growth. His discovery shakes the intellectual foundations of a global movement and sparks debates on flawed economic policies.
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Student Reproduces A Famous Paper
- Thomas Herndon, then a grad student, chose Reinhart and Rogoff's paper to reproduce for class and struggled for months to replicate results.
- His repeated queries eventually led to Reinhardt sending the full spreadsheet, starting the uncovering of errors.
A Chart Can Drive Policy
- Reinhart and Rogoff's chart claimed growth collapses above 90% public debt, and policymakers widely cited it.
- That single visual framing made the paper seem urgent and influenced global austerity debates.
Calculation Choices Alter Conclusions
- A spreadsheet error omitted five countries and an outlier year, skewing the average for the high-debt group.
- Correcting the calculations changed the result from negative growth to positive growth, removing the 90% collapse claim.