I've started this blog to accompany my Indiegogo campaign to fund a project on spreadsheet safety. I want to replicate a famous economic-modelling spreadsheet, the "Reinhart-Rogoff spreadsheet", using tools I've developed for writing modular, easy-to-read, spreadsheets. This will deliver (a) a modular economic model, and (b) a demonstration of how to write spreadsheets that are modular, easy to read, and thereby safer than spreadsheets built using only Excel.
Why do I want to do this? The spreadsheet I'm interested in was written by economists Carmen Reinhart and Kenneth Rogoff for their 2010 paper "Growth in a Time of Debt". They
examined the relation between debt and economic growth in forty-four countries spanning 200 years, and concluded that in countries where debt exceeds 90% of gross domestic
product, economic growth is notably lower.
But early in 2013, Thomas Herndon at the University of Massachusetts tried to replicate the spreadsheet. He couldn't, and eventually discovered a programming error. Reinhart and Rogoff had accidentally omitted five countries when calculating an average. Because their paper's conclusion is so relevant to governments' austerity programmes, journalists pounced, writing features with titles such as "How not to Excel at economics" and "Grad Student Who Shook Global Austerity Movement". Critics said the austerity programmes were founded on a blunder. Reinhart and Rogoff even received threatening email blaming them for tax increases and public-sector cuts, as they describe in "Debt, Growth and the Austerity Debate", a New York Times article for April 16th 2013 in which they explain their paper and the error.
Actually, things are never so simple. The programming error may have caused only a small, not significant, change to the conclusions. And Herndon and his colleagues also disagreed with Reinhart and Rogoff's choice of methods for selecting data and weighting results, things that probably have much more effect.
However, I suspect that using my tools, it would have been harder to omit these countries. That is, harder to make the error. Moreover, it would have been possible to make the spreadsheet formulae — the equations of the economic model — easier to read, and easier to add explanatory commentary to. Had this been possible with Excel, the extra clarity could have averted
much of the ill-informed and hurtful media criticism hurled at Reinhart and Rogoff. That's one of the things that I want to demonstrate with this project.
[Update January 24th 2014] The Christmas and New Year break delayed my publicity. So that I can make it coincide with a launch date that's safely out of the way of the holidays, I've relaunched my campaign at the new URL given at the start of this post.