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He's been on a bit of a book tour recently and his name kept ringing a bell for me dimly every time I saw him pop up, and then one day it hit me, Rogoff is the
by knuckleheads 1y ago
He's been on a bit of a book tour recently and his name kept ringing a bell for me dimly every time I saw him pop up, and then one day it hit me, Rogoff is the economist who was found to have made a serious mistake in their paper about the effect of debts levels on GDP growth a decade and a half ago. The paper argued that the higher the levels of debt, the more gdp growth slowed down and reversed. This paper as used to support a lot of austerity policies in response to the GFC in the years following 2008. Some, at the time, grad students looked into though and found that there were lots of serious mistakes with the paper.
https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt
Leaving a comment for others just in case others are experiencing that same mis-connect. As far as the article goes, we'll see! I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I couldn't say. Interesting times!
- doctorpangloss 1y ago[flagged]
- orwin 1y agoAnd a forceful theter to gold for all major currencies/US partners would have just ended up in a state like the long depression of the 19th century, which would have probably killed the western block, so really the only choice was to let all money float.
- deleted 1y ago[deleted]
- derivagral 1y agoThanks for the link. My memory from that time had it as "merely" excel issues, but as described it is a fair bit worse than that.
- everybodyknows 1y agoThanks -- thus quote seems on the mark: > Economics professor L. Randall Wray criticized Reinhart and Rogoff for combining data "across centuries, exchange rate regimes, public and private debt, and debt denominated in foreign currency as well as domestic currency," in addition to "statistical errors," and for lacking a "theory of sovereign currency".
- nickff 1y agoTo be clear, the error caused a 'kink' in the graph which made it look like there was a 'tipping point' at a 90% debt-GDP ratio. Correcting this error did not change the overall result, which is that a 'high' debt/GDP ratio caused reduced growth.
- janalsncm 1y agoGiven that it doesn’t change the overall result, is it really a “serious” error?
- mathfailure 1y agoYes.
- alephnerd 1y agoYep. It lead to a decade of austerity measures across the EU, which caused most European nations to fall behind the US, despite being head-on-head economically in 2007.
- deleted 1y ago[deleted]
- roughly 1y agoAlso some fairly direct ties to the rise of right-wing movements and governments in Europe.
- alephnerd 1y agoYep. The rise of the far right in Greece due to resentment against the Troika should have been a warning, but hey, they're PIGS, us Dutch and German and Scandinavian voters pulled ourselves up by the bootstraps without any outside help /s.
- rich_sasha 1y agoI'd say his paper was a convenient excuse for people who wanted to do austerity anyway. I mean, no government, with a sophisticated civil service department, including a ministries of finance and central banks packed to the brim with economists and statisticians should do anything based on a paper they didn't reproduce (all the data was public too).
- donmcronald 1y ago> I'm inclined to think that is true, that the US is retreating from the world stage and the dollar will follow, but whether that happens now, later or never, I couldn't say. I don't understand why or how that would be a goal. Doesn't the US get / consume something like 25% of the world's production while having about 5% of the population? If they're consuming 5x their share, the bottom is way, way further down than anyone can fathom, isn't it?
- alfiedotwtf 1y agoAmerica is literally following Trump into isolation. Why trade using a reclusive countries currency? Would you expect Finland to do international trade using North Korean WON?
- deleted 1y ago[deleted]
- mystified5016 1y agoMost of us don't really understand why, but that is apparently the goal of this administration. I'm honestly not sure there's any grand design or even inkling of a plan. It's happening and we have to deal with the consequences
- alwillis 1y agoIt's called The Mar-a-Lago Accord. When you google it, this is the summary: The "Mar-a-Lago Accord" is a proposed economic strategy, often discussed in financial circles, suggesting a coordinated effort to devalue the US dollar and reduce the country's trade deficit. Essentially, it envisions a deal where the US would pressure its trading partners to weaken the dollar and lower US borrowing costs, potentially in exchange for continued US security guarantees. The idea is rooted in the 1985 Plaza Accord, where major economies agreed to jointly weaken the dollar, but with some key differences.
- wahern 1y ago
- deleted 1y ago[deleted]
- nimish 1y agoYep. Trusting a guy who made a rookie excel error is not something I think we should continue to do. Especially when the consequences downstream of that error were so stark in terms of policy.