Wednesday, April 17, 2013

Check the data of those claiming proof of whatever

Many are claiming that high national debt leads to a decline in growth.  According to Mike Konczal, this claim is based on a paper whose results cannot be replicated by other economists.  See "Shocking Paper Claims That Microsoft Excel Coding Error Is Behind the Reinhart-Rogoff Study On Debt",  Business Insider, 2013-04-16.  Among other things, the authors of the study have not released the data they used to determine their results and that they didn't use comparable data from one country to another.

Unfortunately, "This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan's Path to Prosperity budget states their study 'found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth.'"  And the Washington Post considered it a consensus view of economists!

But the debate doesn't end here.  See also "New Research Undermines The GOP's Austerity Agenda", Jeff Spross, Think Progress, 2013-04-16 and the rebuttal from Reinhart and Rogoff, "Critique of Our Work Still Confirms What We Found on High US Debt", Rob Wile, Business Insider, 2013-04-16.