Today at Krugman’s Blog

Posted on by

Professor Krugman made my day by confessing to be a Ulysses Grant admirer. Someday we Grantistas should come out of the woodwork and have a convention.

More important, maybe — there was a study released in 2010 about how government debt caused unemployment, as I understand it. This study, called Reinhart/Rogoff after its authors, was seized upon by conservatives to bolster their argument that the “debt crisis” is our primary economic problem, calling for strict austerity. This study has been enormously influential, apparently. Well, turns out the study is bogus. Krugman writes,

According to the review paper, R-R mysteriously excluded data on some high-debt countries with decent growth immediately after World War II, which would have greatly weakened their result; they used an eccentric weighting scheme in which a single year of bad growth in one high-debt country counts as much as multiple years of good growth in another high-debt country; and they dropped a whole bunch of additional data through a simple coding error.

Fix all that, say Herndon et al., and the result apparently melts away.

Further, the response from R and R to the criticism has been really stupid.

There also appear to be issues with bad Excel coding. See, again, Krugman, and also Rortybomb.

16 thoughts on “Today at Krugman’s Blog”

  1. “…R-R mysteriously excluded data on some high-debt countries with decent growth immediately after World War II…”

    Uhm… like… oh, shoot, what’s the name of that place?
    Wait… wait… it’s coming to me… it’s on the tip of my tongue… Oh, yeah – AMERICA!!!
    OY!

    Now, the question is, was that mistake, and the one in the EXCEL program, an accident, or…?

    Btw – Grant and Sherman were my two favorites from the Civil War.
    And, Lincoln, of course.
    Plus, in many respects, Grant is a very under-rated President.

  4. As I understand it, their paper was influential for two reasons. It seemed to show that not only was there some kind of connection between high debt and a slow economy, but that high debt was the cause of the bad economy, and also that there was a particular debt level (90% of GDP) that provoked this effect.

    The first was used to support austerity policies, and the second to promote them NOW!!!, i.e., with an urgency. It certainly was used as a way to ignore standard economics which would have had governments all over borrowing to stimulate their economies during the Great Recession, aka the Bankster Collapse.

    No one else could replicate their results, and now it seems clear why. The 90% threshold is completely bogus, and while there does appear to be a connection between a bad economy and high government debt, the causality it may be the reverse of what the paper suggested – a bad economy leads to high government debt, not the other way around.

    The Excel coding problem isn’t the only issue with the paper, just the stupidest. It meant they weren’t including a number of countries they (supposedly) thought they were. They also made some questionable decisions about what data they were and weren’t going to intending to include.

    I don’t think anyone should hold their breaths waiting for apologies from all the people who’ve used this paper as a basis for their policies though. The fact that the pretext they were using to make the poor suffer was complete BS won’t really matter, since the point was really to make the poor suffer.

  5. biggerbox,
    The Plutocrats just wish they could get Michelle Rhee and her eraser squad to come in an improve their scores.

  6. I am a Jimmy Carter admirer. He kept us out of war ! !

    Me too, Chief. He’s a man you can respect. Not like that sniveling coward half wit Bush.

  7. When confronted with facts from a female professor, a student from a heavily male-dominated nation where only men got educations said to my statistics instructor, “The facts don’t matter when you know the truth.” He must have been an imported Republican.

  8. Off-Topic: At the end of Rachel Maddow’s show she announced that Gabby Giffords will have a blistering editorial in the New York Times tomorrow regarding the background check bill and its defeat. I can hardly wait to see it.

  9. Thanks, Bonnie. I’ll be looking to hear what she has to say. Needless to say it was a painful disappointment to see the NRA triumph over the will of the American public.

  11. @ Paradoctor: Hey, he was a privileged male confronted by a mere female Ph.D. who dared offend him with actual numbers. What would you expect? Something like, “Evidently I must reexamine my previous thinking in light of new information”? He was well-suited to a Sentate or Congressional office though, where facts need not get in the way of party talking points, no matter how thoroughly disproven. It is hard to take to some of these people seriously anymore, except for the fact that what they actually do is ultimately serious, regardless of what they say. I am just tired of their whoring out our purported “democracy” to trade and industry groups. It is like the recent “settlement” with the fraudulent mortgage lenders where the lenders set up the settlement, paid their people to work it out, and are giving the screwed-over a few hundred dollars each, on average, to make up for stealing their homes. We have a significant number of people in this country who should not be able to sleep at night.

  14. And an Elvis impersonator may have sent the alleged-ricin letters. You can’t make this s**t up.

  15. joan,
    How do we know it wasn’t Elvis impersonating an Elvis impersonator?
    Now THAT’S a conspiracy theory I’d love for people to pick-up!

Comments are closed.