Interlude—Do you understand what they said: By all accounts, Reinhart and Rogoff made some gruesome mistakes in their now-famous study.
Their paper appeared in early 2010. According to Paul Krugman, the paper was “instantly famous.” According to Krugman, “it was, and is, surely the most influential economic analysis of recent years.”
Gack! Three years later, three graduate students discovered and reported the famous professors’ mistakes.
Given the consequences, citizens ought to be angry that the professors’ bungles occurred at all. Citizens ought to wonder why our other major professors left it to three graduate students to uncover the errors—to uncover them three years later.
That said, those three grad students did find the mistakes, and one of the mistakes—the now-famous Excel coding error—was a genuine beaut. Given this awkward circumstance, what should the famous professors do?
Of course! Last Friday, they wrote a column for the New York Times in which they claimed that the basic finding of their paper still holds up. In the early passage which follows, Reinhart and Rogoff admit to one mistake. But they say their fundamental finding has not been overturned:
REINHART AND ROGOFF (4/26/13): Last week, three economists at the University of Massachusetts, Amherst, released a paper criticizing our findings. They correctly identified a spreadsheet coding error that led us to miscalculate the growth rates of highly indebted countries since World War II. But they also accused us of “serious errors” stemming from “selective exclusion” of relevant data and “unconventional weighting” of statistics—charges that we vehemently dispute.As the professors reclaimed their dignity, those UMass graduate students were referred to as “economists” and “researchers.” And the professors’ “fundamental funding” had not been overturned!
The authors of the paper released last week—Thomas Herndon, Michael Ash and Robert Pollin—say our “findings have served as an intellectual bulwark in support of austerity politics” and urge policy makers to “reassess the austerity agenda itself in both Europe and the United States.”
A sober reassessment of austerity is the responsible course for policy makers, but not for the reasons these authors suggest. Their conclusions are less dramatic than they would have you believe. Our 2010 paper found that, over the long term, growth is about 1 percentage point lower when debt is 90 percent or more of gross domestic product. The University of Massachusetts researchers do not overturn this fundamental finding, which several researchers have elaborated upon.
Citizens ought to be very angry that this three-year-old mess occurred. But how about Reinhart and Rogoff’s claim? Is their “fundamental finding” still valid, despite their admitted errors?
Needless to say, that depends on what their fundamental finding was! And we’ll have to admit, we had a hard time discerning what it was from reading last Friday’s column.
What was Reinhart and Rogoff’s key finding? In his own April 19 column, Paul Krugman was able to state the finding quite clearly, though this doesn't automatically mean that he had stated it correctly.
One week later, the famous professors were rather fuzzy as they described their own finding.
You see one account of their basic finding in the second high;lighted passage above. The professors describe the finding two more times as their column proceeds.
In our view, their own account of their paper’s key finding never got real clear. We’ve spent a good chunk of time with their column. But we still can’t really tell you what their key finding was!
Why couldn’t these famous professors describe their key finding more clearly? And why didn’t the New York Times demand more clarity from them?
People! Do we have to ask?
As we type, we’ve been called away from our desk on a matter of national import. Actually, since you’ve asked, we’re heading up to the Hudson Valley to visit our sick older friend.
We don’t want to post a hurried, fuzzy report in which we criticize the Times for permitting a fuzzy column. And so, we’ll leave you with an interim assignment until tomorrow morning.
Your assignment, should you choose to accept it:
Go ahead! Read the column by Reinhart and Rogoff! After all their presentations, do you understand what their key finding was? Beyond that, do they make a plausible case that their key finding holds up?
Reinhart and Rogoff decribed their key finding. Do you understand what they said?
We thought the professors were very fuzzy, in a way which was perhaps strategic. In our view, the Times should have demanded clearer work—but that would have required types of skill and determination the Times doesn’t often possess.
When has the New York Times ever demanded clear work in such circumstances? That isn’t the way our culture works. Simply put, our journalistic and intellectual elites aren’t like that.
We apologize for the delay. Sometimes, though, attention must be paid!
Tomorrow: The professors describe their key finding