AI
Wednesday, January 01, 2014 12:30:13 AM
It's the Austerity, Stupid: How We Were Sold an Economy-Killing Lie .. the first bit outed again ..
Once again, the Beltway fell for cherry-picked data—and you paid the price.
—By Kevin Drum | September/October 2013 Issue
Uncle Sam being squeezed by a belt Illustration by Zohar Lazar
It was the Excel error heard round the world.
In January 2010, as the global economy was slowly beginning to claw its way out of the depths of the Great Recession, the Harvard economists Carmen Reinhart and Ken Rogoff published a short paper with a grim message .. http://www.nber.org/papers/w15639.pdf?new_window=1 : Too much debt kills economic growth. They had compiled a comprehensive database of debt episodes throughout the 20th century, and their data told an unmistakable story: Time and again, countries that rack up high debt levels have gone on to suffer years—sometimes decades—of stagnation.
As economics studies go, it was nothing short of a bombshell. As its conclusions were invoked from Washington to Brussels, tackling the recession suddenly became less important than tackling deficits. For the next three years, stimulus was out, austerity was in, and the protests of critics were all but buried amid the headlong rush to slash spending.
But then, on April 15 of this year, a trio of researchers at the University of Massachusetts published a paper .. http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf .. that took a fresh look at Reinhart and Rogoff's study. It turned out there was a problem: R&R had presented data from a list of 20 countries that filled lines 30 through 49 on a spreadsheet. But the formula that calculated the results relied on lines 30 through 44. Oops.
On its own, the spreadsheet error had only a modest effect .. http://www.nextnewdeal.net/rortybomb/researchers-finally-replicated-reinhart-rogoff-and-there-are-serious-problems .. on the paper's conclusions, but the UMass team had other, weightier criticisms that taken together called R&R's conclusions into serious question. Still, under ordinary circumstances the whole thing would have been little more than a dry academic debate.
But these were far from ordinary circumstances. Like a well-aimed snowball that sets off an avalanche, the UMass paper changed everything.
To fully understand the R&R affair...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=95191447
to link .. sorry, i meant to include it in the post this replies to ..
Once again, the Beltway fell for cherry-picked data—and you paid the price.
—By Kevin Drum | September/October 2013 Issue
Uncle Sam being squeezed by a belt Illustration by Zohar Lazar
It was the Excel error heard round the world.
In January 2010, as the global economy was slowly beginning to claw its way out of the depths of the Great Recession, the Harvard economists Carmen Reinhart and Ken Rogoff published a short paper with a grim message .. http://www.nber.org/papers/w15639.pdf?new_window=1 : Too much debt kills economic growth. They had compiled a comprehensive database of debt episodes throughout the 20th century, and their data told an unmistakable story: Time and again, countries that rack up high debt levels have gone on to suffer years—sometimes decades—of stagnation.
As economics studies go, it was nothing short of a bombshell. As its conclusions were invoked from Washington to Brussels, tackling the recession suddenly became less important than tackling deficits. For the next three years, stimulus was out, austerity was in, and the protests of critics were all but buried amid the headlong rush to slash spending.
But then, on April 15 of this year, a trio of researchers at the University of Massachusetts published a paper .. http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf .. that took a fresh look at Reinhart and Rogoff's study. It turned out there was a problem: R&R had presented data from a list of 20 countries that filled lines 30 through 49 on a spreadsheet. But the formula that calculated the results relied on lines 30 through 44. Oops.
On its own, the spreadsheet error had only a modest effect .. http://www.nextnewdeal.net/rortybomb/researchers-finally-replicated-reinhart-rogoff-and-there-are-serious-problems .. on the paper's conclusions, but the UMass team had other, weightier criticisms that taken together called R&R's conclusions into serious question. Still, under ordinary circumstances the whole thing would have been little more than a dry academic debate.
But these were far from ordinary circumstances. Like a well-aimed snowball that sets off an avalanche, the UMass paper changed everything.
To fully understand the R&R affair...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=95191447
to link .. sorry, i meant to include it in the post this replies to ..
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
