Reinhart and Rogoff set a 90% debt threshold — one omitted Excel row collapsed it

In 2010, Harvard economists Carmen Reinhart and Kenneth Rogoff published 'Growth in a Time of Debt' in the Papers and Proceedings of the American Economic Review — a non-peer-reviewed section. The paper claimed that when public debt passed 90% of GDP, average growth was roughly halved; their headline figure put average growth above the threshold at −0.1%.

The 90% figure became the standard citation for austerity. The Paul Ryan budget proposal quoted the study as conclusive evidence on the consequences of high debt. EU Commissioner Olli Rehn cited it to argue that European public debt would be 'a permanent drag on growth.' UK Chancellor George Osborne leaned on it from 2010.

In April 2013, Thomas Herndon — a graduate student at the University of Massachusetts Amherst who could not reproduce the result in a class exercise — published a critique with Michael Ash and Robert Pollin. They found an Excel coding error that omitted several countries from the averages, selective exclusion of early post-war data for Australia, Canada and New Zealand, and a New Zealand figure weighted on a single 1951 year of −7.6% instead of five years averaging +2.6%.

Correctly calculated, average real GDP growth above 90% debt was +2.2%, not −0.1%. Reinhart and Rogoff acknowledged the coding error in The New York Times — 'Full stop. HAP are on point' — while contesting the rest. The paper was never retracted; the critique ran in the Cambridge Journal of Economics in 2014. Paul Krugman wrote that the affair showed austerity had been 'sold on false pretenses.'