"Two Harvard economists on Wednesday acknowledged errors in a study that has been cited by policymakers around the world as justification for government austerity campaigns, but said the "central message" of their research was still valid.

The 2010 study by Carmen Reinhart and Kenneth Rogoff found economic growth throughout modern history has slowed dramatically when a government's debt exceeds 90 percent of a country's annual economic output.

But in a study made public this week, researchers from the University of Massachusetts at Amherst found spreadsheet coding errors in Reinhart and Rogoff's work.

The two Harvard economists said the mistake was an accident.

Speaking to Today business presenter Simon Jack, Professor Robert Pollin explained that research methods become more inaccurate the more recently you apply their test.

"The relationship evaporates entirely," he said. "

Mistakes that mean....

"First off, the researchers made a major error in their Excel spreadsheet's formula: they skipped 5 rows of data. Oops.

Second, they inexplicably (or maybe intentionally - no explanation has been presented) excluded post-WWII data for countries whose growth was positive while debt was above 90% of GDP from the spreadsheet.

Third, if a country had positive growth for multiple years while debt was above 90% of GDP, they averaged all those positive years together into a single number, then gave the multi-year aggregate result the exact same weight as a single year from a country that had negative growth.

The flawed (faked?) study concluded that economic growth in countries with debt greater than 90% of GDP is always negative at -0.1%.

But if you include the data that was left out of the spreadsheet, add in the rows of data that were skipped, and give each year's data the same weight, the actual historic growth rate when the debt exceeds 90% of GDP is 2.2%. "

http://www.greenmountaindaily.com/diary/9855/austerity-study-was-100-completely-and-totally-wrong.