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I think you're overstating both the paper's impact, and the significance of the error. Most such papers are used to support existing policy preferences, not dr

by nickff 6y ago

I think you're overstating both the paper's impact, and the significance of the error. Most such papers are used to support existing policy preferences, not drive them. In addition, the error didn't reverse or erase the correlation, it diminished it, and removed the inflection point from the curve.

sheetjs 6y ago
It was literally cited by Britain's finance minister George Osborne as justification for UK government austerity: > As Ken Rogoff himself puts it, "there's no question that the most significant vulnerability as we emerge from recession is the soaring government debt. It's very likely that will trigger the next crisis as governments have been stretched so wide." https://web.archive.org/web/20100414205630/http://www.conservatives.com/News/Speeches/2010/02/George_Osborne_Mais_Lecture_-_A_New_Economic_Model.aspx https://web.archive.org/web/20100414205630/http://www.conser...
- nickff 6y ago
  People often cite papers which support their positions, but correlation does not necessarily imply causation, and the paper is rarely decisive.
  - mcv 6y ago
    Not the paper on its own, maybe, but it bolsters other arguments. If someone already wants austerity, an authoritative paper saying that's better will make them want austerity more, and gives them a strong argument in discussions with opponents, and may sway people who are unsure.
strangeattractr 6y ago
The most salient point of the paper was the inflection point of 90% for sharply lower growth. It was and still is used by proponents of fiscal austerity to argue against fiscal stimulus.
GuB-42 6y ago
Here is an excellent video about this subject (in French, but the auto-translate subtitles are understandable) https://www.youtube.com/watch?v=yeX_Zs7zztY https://www.youtube.com/watch?v=yeX_Zs7zztY To summarize: - The first two thirds of the video is a retelling of the story, the last third is an analysis of the data - There are two problems in the original paper: a weird way of computing averages, and a mistake in their Excel file. - There is a correlation, but it is weak (R2=0.04), and if there is an inflection point, it is around 30-40%, not 90%. - That paper is likely to have been selected by politicians to support their policies instead of influencing them (confirmation bias).
FabHK 6y ago
> I think you're overstating [...] the paper's impact Krugman [0] called it "surely the most influential economic analysis of recent years" and adds that it "quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact." However, indeed, he cautions that "the Reinhart-Rogoff fiasco needs to be seen in the broader context of austerity mania: the obviously intense desire of policy makers, politicians and pundits across the Western world to turn their backs on the unemployed and instead use the economic crisis as an excuse to slash social programs. What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses." I'd say the paper made it certainly easier for the Very Serious People[1] to push through their austerity agenda. [0] https://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html https://www.nytimes.com/2013/04/19/opinion/krugman-the-excel... [1] Krugman's derogatory term for duplicitous policy wonks (like Paul Ryan) that pretend to be thoughtful and serious and concerned about the nefarious long term effects of debt when discussing stimulus and spending and social programs, but then typically turn around and implement huge tax cuts without second thoughts...
- nickff 6y ago
  Krugman's editorials are polemics, not economics. I don't think anyone should trust the content of an opinion piece which purports to describe the logic, motives, and rationales of ideological opponents, as was the case in your linked article.
  - FabHK 6y ago
    > Krugman's editorials are polemics, not economics. The discussion here is not about economics. The discussion is about the impact of the (flawed) Reinhart-Rogoff paper, which one commenter thought was overstated. > I don't think anyone should trust the content of an opinion piece [...] Krugman is of the opinion that said paper had 1. a big (and 2. a deleterious) impact. For the first contention (which is, again, the pertinent topic), you don't have to rely on Krugman's expert assessment, though, you can look at the evidence: the infamous 90% inflection point had been quoted all over the place (as for example in the WaPo editorial cited by Krugman). Lastly, what makes an article describing "the logic, motives, and rationales of ideological opponents" intrinsically untrustworthy?

by nickff 6y ago

sheetjs 6y ago

It was literally cited by Britain's finance minister George Osborne as justification for UK government austerity: > As Ken Rogoff himself puts it, "there's no question that the most significant vulnerability as we emerge from recession is the soaring government debt. It's very likely that will trigger the next crisis as governments have been stretched so wide." https://web.archive.org/web/20100414205630/http://www.conservatives.com/News/Speeches/2010/02/George_Osborne_Mais_Lecture_-_A_New_Economic_Model.aspx https://web.archive.org/web/20100414205630/http://www.conser...

nickff 6y ago
People often cite papers which support their positions, but correlation does not necessarily imply causation, and the paper is rarely decisive.
- mcv 6y ago
  Not the paper on its own, maybe, but it bolsters other arguments. If someone already wants austerity, an authoritative paper saying that's better will make them want austerity more, and gives them a strong argument in discussions with opponents, and may sway people who are unsure.

strangeattractr 6y ago

The most salient point of the paper was the inflection point of 90% for sharply lower growth. It was and still is used by proponents of fiscal austerity to argue against fiscal stimulus.

GuB-42 6y ago

Here is an excellent video about this subject (in French, but the auto-translate subtitles are understandable) https://www.youtube.com/watch?v=yeX_Zs7zztY https://www.youtube.com/watch?v=yeX_Zs7zztY To summarize: - The first two thirds of the video is a retelling of the story, the last third is an analysis of the data - There are two problems in the original paper: a weird way of computing averages, and a mistake in their Excel file. - There is a correlation, but it is weak (R2=0.04), and if there is an inflection point, it is around 30-40%, not 90%. - That paper is likely to have been selected by politicians to support their policies instead of influencing them (confirmation bias).

FabHK 6y ago

> I think you're overstating [...] the paper's impact Krugman [0] called it "surely the most influential economic analysis of recent years" and adds that it "quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact." However, indeed, he cautions that "the Reinhart-Rogoff fiasco needs to be seen in the broader context of austerity mania: the obviously intense desire of policy makers, politicians and pundits across the Western world to turn their backs on the unemployed and instead use the economic crisis as an excuse to slash social programs. What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses." I'd say the paper made it certainly easier for the Very Serious People[1] to push through their austerity agenda. [0] https://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html https://www.nytimes.com/2013/04/19/opinion/krugman-the-excel... [1] Krugman's derogatory term for duplicitous policy wonks (like Paul Ryan) that pretend to be thoughtful and serious and concerned about the nefarious long term effects of debt when discussing stimulus and spending and social programs, but then typically turn around and implement huge tax cuts without second thoughts...

nickff 6y ago
Krugman's editorials are polemics, not economics. I don't think anyone should trust the content of an opinion piece which purports to describe the logic, motives, and rationales of ideological opponents, as was the case in your linked article.
- FabHK 6y ago
  > Krugman's editorials are polemics, not economics. The discussion here is not about economics. The discussion is about the impact of the (flawed) Reinhart-Rogoff paper, which one commenter thought was overstated. > I don't think anyone should trust the content of an opinion piece [...] Krugman is of the opinion that said paper had 1. a big (and 2. a deleterious) impact. For the first contention (which is, again, the pertinent topic), you don't have to rely on Krugman's expert assessment, though, you can look at the evidence: the infamous 90% inflection point had been quoted all over the place (as for example in the WaPo editorial cited by Krugman). Lastly, what makes an article describing "the logic, motives, and rationales of ideological opponents" intrinsically untrustworthy?