#### Comment Preferences

• ##### Good mornin', Eric...(26+ / 0-)

I confess to not being an econwonk. I sorta get the overall idea about the Krugman/Rogoff & Reinhart debate (no debate about R&R errors) but it's all above my paygrade.
I can do some science and engineering stuff, but big concepts in economics...
not so much.

All sane people detest noise. Mark Twain

• ##### Its just math.(49+ / 0-)

I don't know if you're asking for a plain explanation or not, but I'll give it a shot anyway :)

First, the R&R "study" is just using some very basic math to prove a correlation. Its actually rather simple, using publicly available historical data from a bunch of nations. For each year, they compared (national debt / GDP) to % growth in GDP for that year. Average all that out for all the years and all the nations and magically find that as (national debt / GDP) goes above 0.9, % growth decreases below zero.

Now, none of that proves any kind of correlation, so what the study had to do was break successive years per nation into "buckets." Where (debt/GDP) > 0.9 in successive years, take an average of that, compared to the average %growth over those same years. That is a useful correlation, on a per nation basis, but not for the reasons the frog and rhino thought. Don't worry about that now.

R&R's mistake was to take all of those buckets over all of those nations and average them all together. This doesn't make sense mathematically. Let us say that the UK had 10 successive years of (debt/GDP) > 0.9 with an average of 2% growth (i'm making that up, but its an equivalent error to what R&R did). Let us also say that New Zealand had a single year with (debt/GDP) > 0.9 but -7% growth over that year (due to, say, the big crash a few years ago). For one thing, the one-off year is so far off the median to be considered, statistically, an anomaly, so that single year's data is not useful. Secondly, if you average those together equally, its (-7 + 2) / 2 = -2.5. Its a non-sense result: that one year in one country is given equal weight to 10 years in another. If given proper weighting, the result should be closer to +1.2%

R&R also excluded certain data, both intentionally and (presumably) accidentally that is much more favorable to growth rather than contraction and haven't yet really explained why they would exclude that data, but not obvious anomalous data like the New Zealand contraction.

I hope that helps. I didn't want to simplify any further than that since you said you have some understanding of science/engineering concepts. There isn't much conceptually fuzzy about this, its just (bad) math.

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### You are very smart!(19+ / 0-)

Thanks so much for taking the time to try to ex[plain these complexities to us humanities maj0ors.

• ##### There was an even bigger problem than all of those(37+ / 0-)

huge problems: R&R got a spreadsheet formula wrong, making the results look even worse, and failed to test it. Basically, this would have gotten a failing grade in first-year statistics. The devotees of faith-based economics who seized on their "results" to justify austerity policies of course never asked to check the data or the calculations.

Half of the true justification for austerity in the US has long been the Southern Strategy of cutting social programs in the name of racism, bigotry, misogyny, and so on. In particular, it's OK "as long as Blackbirds get hurt worse." ("Tricky Duck" Nixon strategist Lee Antwasher) The other half, and the justification everywhere else, is it's OK as long as the rich get richer.

Ceterem censeo, gerrymandra delenda est

[ Parent ]

• ##### 'as long as the rich get richer'(14+ / 0-)

And in the meantime,  in-between time, ain't we got  fun??

There is no question that there is an unseen world. The problem is, how far is it from Midtown and how late is it open? -- Woody Allen

[ Parent ]

• ##### yup(9+ / 0-)

I didn't address it directly, but indirectly (the "accidental" exclusions).

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### Does it count as an anomaly of exclusion(7+ / 0-)

if they don't write op-eds when the right-wingies are "misinterpreting" their results, but they do write op-eds when anyone else tries to correct them?

• ##### I leave the interpretation of that open(3+ / 0-)
Recommended by:
ericlewis0, Eyesbright, Eikyu Saha

much as I understand and can respect economics as a science, I still want empirical evidence. So think what you will. I see no useful purpose in condemning the rhino and frog beyond condemning the falsity of their research.

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### And both of the authors of the formula(3+ / 0-)

seem to be funded by or associated with Pete Peterson and other rightwing interests who needed a nice academic excuse for their destructive theory.

• ##### Funny thing about that. /snark eom(2+ / 0-)
Recommended by:
ericlewis0, Creosote

Renewable energy brings national global security.

[ Parent ]

• ##### Thanks, RadicalParrot...(7+ / 0-)

I knew the data was skewed. And the exclusion of additional data "favorable to growth rather than contraction" was also problematic.
Perhaps my real question(s) is how a fundamental error in calculating the data was introduced into the formulation (lack of diligence or looking for numbers that support a forgone conclusion) and, if the intent was to produce a given result, why.
I wonder if R&R derived any of their conclusions from info gathered from Rasmussen and Gallup?

All sane people detest noise. Mark Twain

[ Parent ]

• ##### I can't speak to their motivations.(8+ / 0-)

I will say it is quite easy to make errors in Excel spreadsheet formulas. Even if the formula is correct, you have to specify the range of cells (data points) that you want to include. If you specify the variables incorrectly, and add additional data later, that additional data may be excluded from the result. It can slip by unnoticed quite easily.

Did they cook the books to get the result they wanted? I don't know. Its entirely possible.

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### They didn't cook the books. (2+ / 0-)
Recommended by:
ericlewis0, Calamity Jean

There is no way they would be that bold.

What they did was more subtle -- when they got results that agreed with their preconceived notions, they didn't double-check.

If their spreadsheet had advocated taxing the rich and investing in infrastructure, you can bet that they would have double-checked every single cell.

• ##### True plus.(4+ / 0-)

They did not ask anyone else to double check their results.

The study was not a peer reviewed study published in a respected journal, it was an article asserting a correlation in a trade publication that relied on the "Harvard reputation" and little else.

Who is more to blame, the idiots who published unchecked results, or the idiots in charge of actual economies who relied on that unreliable (ultimately falsified) information?

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### Oy!(8+ / 0-)

This is where I put my head down on the desk in the knowledge that I'll never get it :)

Actually, I do get quite a bit of it (not all), and your explanation was very helpful. Thanks!

• ##### Wasn't for a general audience(8+ / 0-)

tried to avoid technical terms and stick to the math but it still requires a little bit of technical knowledge to get. If there is something you'd like explained better I will give it a shot :)

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### If they were mistakes(5+ / 0-)

wouldn't half of the errors disprove their conclusion, on average?

It wasn't a mistake.

Republican tax policies have led to financial conditions which have caused Republicans to demand cuts to programs they have always opposed.

[ Parent ]

• ##### I'm sorry I don't follow...(1+ / 0-)
Recommended by:
ericlewis0

please make your case that R&R intended to produce their erroneous conclusion. That isn't my intent to dispute or otherwise. I'm just not sure what you mean by that.

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### Every error they made(1+ / 0-)
Recommended by:
RiveroftheWest

Supported their conclusion (they made a number of errors).

Wouldn't it hold that an error-prone report would have at least one error would have gone the other way?

Republican tax policies have led to financial conditions which have caused Republicans to demand cuts to programs they have always opposed.

[ Parent ]

• ##### Maybe, maybe not.(1+ / 0-)
Recommended by:
RiveroftheWest

That is the danger with doing data analysis like this. I get what you're saying. It seems pretty unlikely that all the "errors" they made were in favor of their hypothesis.. but that is exactly why peer review exists and researchers take great pains to do blind and double blind studies.

It is entirely possible they did it on purpose. Its also entirely possible they subconsciously introduced and allowed those subtle errors that lined up with their conclusion. In either case, they were wrong, and in either case, the policy makers who used their non peer reviewed results were reckless (to say the least).

“Birds…scream at the top of their lungs in horrified hellish rage every morning at daybreak to warn us all of the truth. They know the truth. Screaming bloody murder all over the world in our ears, but sadly we don’t speak bird.” Kurt Cobain

[ Parent ]

• ##### To add to the replies of others(14+ / 0-)

There is a reason that your professor wants you to use peer-reviewed sources in your term paper. The study in question was not peer-reviewed.

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