Microsoft Excel: The Ruiner of Global Economies?

This is a series of articles on the news that a well-cited and influential paper by Carmen Reinhart and Ken Rogoff had an Excel error in it, which led to an overstating of the association between debt and growth. There are other more fundamental problems with the paper – see comments by economists below.

From a training viewpoint, it is relevant to note that this was discovered by a graduate student, working on a class assignment: find a famous study and replicate it.

This entry has four sections: (a)the student; (b)comments by other economists; (c)replication & programming; and (d)coverage from the press.

The Story of the Student
Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement
Kevin Roose | The New York Magazine
April 18, 2013

How a student took on eminent economists on debt issue – and won
Edward Krudy | Reuters
April 18, 2013

‘They Said at First That They Hadn’t Made a Spreadsheet Error, When They Had’
Peter Monagham | Chronicle of Higher Education
April 24, 2013
My favorite Q & A from this interview with Thomas Herndon is:
Q. This is more than a spreadsheet error, then?

A. Yes. The Excel error wasn’t the biggest error. It just got everyone talking about this. It was an emperor-has-no-clothes moment.

Comments/Analysis by Economists
Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogo ff
Thomas Herndon, Michael Ash and Robert Pollin | Political Economy Research Institute
April 15, 2013
easier to read pdf of paper, but link above includes data, code, etc.

Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems
Michael Konczal | Next New Deal (blog of the Roosevelt Institute)
April 16, 2013

Reinhart and Rogoff are wrong about austerity
Robert Pollin and Michael Ash | Financial Times
April 17, 2013

Reinhart/Rogoff and Growth in a Time Before Debt
Arindrajit Dube | Next New Deal (blog of the Roosevelt Institute)
April 17, 2013

Reinhart, Rogoff, and How the Macroeconomic Sausage Is Made
Justin Fox | Harvard Business Review
April 17, 2013

The Excel Depression
Paul Krugman | New York Times
April 19, 2013

Replication & Programming
The Mysterious Powers of Microsoft Excel
Colm O’Regan | BBC News Magazine
April 20, 2013

What the Reinhart & Rogoff Debacle Really Shows: Verifying Empirical Results Needs to be Routine
Victoria Stodden | The Monkey Cage Blog
April 19, 2013

What Reinhart-Rogoff Means for the Replication Debate
Political Science Replication Blog
April 19, 2013

Microsoft Excel: The ruiner of global economies?
Peter Bright | Ars Technica
April 16, 2013
This piece describes the Excel error, but also discusses other issues with the paper, including the interesting tidbit that the original Reinhart-Rogoff paper was published in the American Economic Review proceedings issue(May), which are not peer reviewed.

Two clever economists have looked to see if researchers pad their resumes by hiding their AER proceedings publications. The University of Michigan economics department was included in their sample.

Research: Bad math rampant in family budgets and Harvard studies
Jeremy Olshan | Wall Street Journal (Market Watch blog)
April 17, 2013
88% of spreadsheets have errors

On the accuracy of statistical procedures in Microsoft Excel 2007
B.D. McCullough and David A. Heiser | Computational Statistics and Data Analysis
March 2008
These authors criticize Excel for its use in statistical analysis because of its failures in statistical distributions, random number generation, and the NIST StRD(Statistical Reference Datasets). I suspect most users of Excel are using the simpler tools: summation, product, etc., but on occasion faculty have used Excel as a rudimentary statistical analysis tool.

What We Know about Spreadsheet Errors
Raymond Panko | Journal of End User Computing
May 2008

Come to Jesus Slides: Use Script-Based Analysis, not Excel
Matt Frost | Charlottesville, Virginia
The author is recommending R or more specifically R Studio, but his point applies to any script-based statistical package.

The Press
Too many to link to for the moment, but here’s a sampling:
[Search Link]

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