Several of my colleagues on the Harvard faculty have recently been casualties in the cross-fire between fiscal austerians and stimulators. Economists Carmen Reinhart and Ken Rogoff have received an unbelievable amount of press attention, ever since they were discovered by three researchers at the University of Massachusetts to have made a spreadsheet error in the first of two papers that examined the statistical relationship between debt and growth. They quickly conceded their mistake.
Then historian Niall Ferguson, also of Harvard, received much flack when — asked to comment on Keynes’ famous phrase ”In the long run we are all dead” — he “suggested that Keynes was perhaps indifferent to the long run because he had no children, and that he had no children because he was gay.”
There is more to be said about each of the two cases. (i) Reinhart and Rogoff’s 2010 estimates had already been superseded by a subsequent 2012 paper of theirs written along with Carmen’s husband, Vincent, which used a more extensive data set where the error does not appear. (ii) The debt-growth causality is debated. (iii) “Some of Ferguson’s best friends are gay.” (iv) Keynes was actually bi-sexual. (v) He tried to have children. And so forth. Most of this has already been said many times by now. Apparently people are even more fascinated by Harvard than they are about macroeconomic theory.
But what does it all have to do with the debate between austerians and stimulators?