

Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems - mey
http://www.nextnewdeal.net/rortybomb/researchers-finally-replicated-reinhart-rogoff-and-there-are-serious-problems

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nbouscal
“If this error turns out to be an actual mistake Reinhart-Rogoff made, well,
all I can hope is that future historians note that one of the core empirical
points providing the intellectual foundation for the global move to austerity
in the early 2010s was based on someone accidentally not updating a row
formula in Excel.”

One of the fundamental ideas behind science is that results must be able to be
replicated, and that peer review is essential. Three years later, and we're
just now finding out that these guys made a typo (if you're charitable enough
to believe that's what it was). If you didn't already think the state of
economic ‘science’ was bad…

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paganel
One of the mistakes is thinking that Economics is in a fact a science. It is
not.

Second, I think it is only right that economic decisions that influenced the
lives of millions should be based on political principles, and not technical
ones. The latter only give you things like the long-term suicidal one-child
policy, and you also don't get anyone to blame, while the first at least give
you the chance to change course mid-way and a sort of feedback mechanism.

Also, using 50-year cycles in order to determine long term economic "truths"
is a joke.

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Aloisius
_The average real GDP growth rate for countries carrying a public debt-to-GDP
ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as
[Reinhart-Rogoff claim]._

That magnitude of error will bring up questions of intentional manipulation.
Sure, I can understand a math error in your Excel table leading to a minor
problem, but excluding post-World War 2 years seems like blatant manipulation.

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pekk
Technically, it's the same data as before, so it's not the same thing as when
you replicate an experiment in other fields, by going and getting more data.

"Failure to replicate" means "we didn't find it happening when we checked
again," not "we couldn't figure out how they screwed up their analysis".

~~~
jere
Yea, I was quite confused by the word replicate here. I thought it
specifically meant the results in the original were valid.

~~~
sp332
They were able to replicate the results, but only by using the same broken
methodology. :)

~~~
jere
Hmm... thanks. That actually makes perfect sense.

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ColinWright
Other discussion: <https://news.ycombinator.com/item?id=5559281>

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guelo
Harvard should fire the two professors. They committed academic malpractice by
knowingly publishing bad data in a non-peer reviewed publication in order to
influence the political debate.

~~~
pc86
You don't know it was intentional.

~~~
guelo
It's at least very suspicious that they refused to get it peer reviewed while
making politically inflammatory claims.

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ttrreeww
Just print money to fund economic activity... Instead of print debt to create
money and give them to the rich to buy our public debt. (Gov spending then
funnels to large corporate and..)

~~~
bubbleRefuge
Money is being printed depending upon your definition of money. When the
treasury spends in excess of tax revenues which is essentially all the time,
by law they must issue a treasury security and "sell" it. This security gets
sold to the primary dealer ( think big Wall Street firms). Treasury then gets
account credited at Fed in the amount of security sale. Treasury then spends
the money back into the economy. This "money" is called reserve balance (
federal funds/vertical money/high powered money). Since the Fed's job is to
execute monetary policy ( i.e. price of money) by directly manipulating the
federal funds rate, they often buy back that treasury bond from the primary
dealer and remove the excess reserves else they lose grasp of the federal
funds rate. Would be nice to get rid of this obfuscated gymnastics between
Fed, Treasury, and Wall Street, and simply have direct printing of money as
per congressional budgets passed by Congress. The current system causes mucho
confusion and the illusion that the government is self funded. How can issuer
of a fiat currency be involuntarily insolvent?

edit: With direct printing, the fed funds rate would go to zero. No need for
Treasury Bonds or "borrowing" per se.

~~~
ttrreeww
With direct printing, there is no need for taxes.

~~~
bubbleRefuge
Taxes establish a demand for the currency. Government wants to provision
itself. How does this happen with fiat currency? Government levies a tax and
then offers employment in exchange fiat currency which is the only means of
settling the tax liability. Without the tax it would be hard for a fiat
currency to take hold over other alternatives.

~~~
ttrreeww
You are not serious... if you are, I'll take all the paper with numbers off of
your hand right now!

~~~
bubbleRefuge
Not following you. I'm saying that fiat derives value from the state. Taxes
drive money.

~~~
ttrreeww
So if they stop taxing us, you don't value your money anymore?

