Wednesday, June 5, 2013

Best Way to Write About Reinhart-Rogoff for a Neoliberal

So for a typical German VWLer (yes, in Germany macro is abbreviated in the three big economic disasters) believes that R-R have to be right somehow. The best way for them to talk about flawed research is shown in the Fazit-blog of one of the biggest German newspapers (FAZ), for which several of the paper's editors provide their insight.The defense is creative to say the least:
  • The average results of Herndon-Ash-Pollin aren't far off the median results of R-R, those were "preferred" by the authors, therefore the paper isn't all that flawed or something, Who cares about that math stuff.
  • The post avoids any discussion about causation. The word used is "Zusammenhang"; it does mean correlation but also connection, interrelationship, and link. The correct word would have been "Korrelation". Who cares about words and stuff. Probably those fools who als still believe that math is important.
  • The 90 % nonsense isn't mentioned anywhere in the post.
Well, OK  I do actually expect that VWLer compare averages and medians. Also, I am not at all surprised that they willfully use the wrong term, or that they do not once mention what the discussion is actually about. What has me mildly puzzled, though, is that there is another blog post by the name of "Zu viele Schulden machen arm"(to much debt makes [countries] poor), for it clearly shows that they assumed causation, used the 90 % nonsense as prove and did not care at all about the median and instead used R-R's averages (my translation):

Somewhere above this threshold [90 % debt to GDP] growth suffers and does so significantly.
The economy of the examined countries grew at least 3 % on average as long as the public debt remained under 90 % of GDP, but countries with phases of higher debt did on average not even reach the zero line and instead contracted.
Other researchers [no link provided, so I assume he means Limbaugh, Beck et. al.] soon found out that typically the debt grew before the growth slowed.

This was a cross post of a column in the Sunday FAZ (FAS) paper. My personal guess is that P. Welter, who wrote the blog post in defense of R-R, actually tries to get his colleague fired.

Perhaps, I should have a shot at becoming a FAZ editor. I can use flawed research, show any number of false results, quote mine somebody, pretend that I am doing Quality Journalism, and demand money from Google for the great service I provide to the society.

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