During his PhD studies at the University of Massachusetts Amherst Herndon became known for critiquing "Growth in a Time of Debt", a widely cited academic paper by Carmen Reinhart and Kenneth Rogoff supporting the austerity policies implemented by governments in Europe and North America in the early 21st century.

"[7][8] New York magazine wrote that Herndon "just used part of his spring semester to shake the intellectual foundation of the global austerity movement.

"[9] During his graduate studies in a class with Professor Michael Ash, Herndon was assigned to pick an economics paper and try to replicate the results.

After further consultation with his professors Michael Ash and Robert Pollin, Herndon was encouraged to contact the authors Reinhart and Rogoff at Harvard.

Herndon looked into the detail of the original spreadsheet and found several issues:[4] The basic conclusion that countries with indebtedness rates above 90% of GDP have lower growth rates still held, but the most spectacular results disappeared, the relationship was much gentler and there were numerous exceptions to the rule.