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Is The Reinhart-Rogoff Result Based On A Simple Spreadsheet Error? Oh my goodness, no. That's the least of it. They took all Commonwealth countries, found the

Is The Reinhart-Rogoff Result Based On A Simple Spreadsheet Error? Oh my goodness, no. That's the least of it. They took all Commonwealth countries, found the periods where they had over 90% debt-to-GDP ratio, and EQUAL WEIGHTED them regardless of length or country. I won't do a better job of explaining this than the article: "U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally." Wow.

calinet6 14y ago
That in addition to the Excel error, this is just stupidity. I can't believe it got as far as it did, except that certain groups really wanted to believe its conclusions, even though they were false.
- bernardom 14y ago
  Yup. They also subjectively ignored the post-WW2 period for most countries; coincidentally when countries had high debt and grew like crazy. I bet that if you started with the desired results in mind for a study like this, you could create a list of variables to try and pick the combination that maximizes your metric. Then provide a post-hoc justification for each choice. For example: * debt-to-gdp 80%, 85%, 90%, 95% * Ignore years after ww2 (the war was an externality) * Don't ignore years after ww2 (why would we? they're years.) * Ignore years after ww2 for countries that got aid from US (removing an externality) * Ignore years after ww2 for countries that did not get aid from US (most countries did, don't want to mix the sample) * Ignore years after ww2 for countries that were in the European theater (removing an externality) * Ignore years after ww2 for countries that were not in the European theater (not affected by war like rest of globe) * Ignore years after any war (externality) * Weigh by population of country at time of study (lazy way to account for size of industry) * Weigh by population of country by year (better way to accounts for size of industry) * Equal weight for all countries (easy to explain) * For each country, take periods of high debt-to-gdp and compare against periods without high debt-to-gdp; then compare countries equally (easy to explain-ish) * Take each period of consecutive years with a high debt-to-gdp ratio and call each period one sample point. Average these inequal-length points together and compare against all years of low debt-to-gdp (Come on! Nobody would believe-- oh no.)

calinet6 14y ago

That in addition to the Excel error, this is just stupidity. I can't believe it got as far as it did, except that certain groups really wanted to believe its conclusions, even though they were false.

bernardom 14y ago
Yup. They also subjectively ignored the post-WW2 period for most countries; coincidentally when countries had high debt and grew like crazy. I bet that if you started with the desired results in mind for a study like this, you could create a list of variables to try and pick the combination that maximizes your metric. Then provide a post-hoc justification for each choice. For example: * debt-to-gdp 80%, 85%, 90%, 95% * Ignore years after ww2 (the war was an externality) * Don't ignore years after ww2 (why would we? they're years.) * Ignore years after ww2 for countries that got aid from US (removing an externality) * Ignore years after ww2 for countries that did not get aid from US (most countries did, don't want to mix the sample) * Ignore years after ww2 for countries that were in the European theater (removing an externality) * Ignore years after ww2 for countries that were not in the European theater (not affected by war like rest of globe) * Ignore years after any war (externality) * Weigh by population of country at time of study (lazy way to account for size of industry) * Weigh by population of country by year (better way to accounts for size of industry) * Equal weight for all countries (easy to explain) * For each country, take periods of high debt-to-gdp and compare against periods without high debt-to-gdp; then compare countries equally (easy to explain-ish) * Take each period of consecutive years with a high debt-to-gdp ratio and call each period one sample point. Average these inequal-length points together and compare against all years of low debt-to-gdp (Come on! Nobody would believe-- oh no.)