
Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems - rdp
http://www.nextnewdeal.net/rortybomb/researchers-finally-replicated-reinhart-rogoff-and-there-are-serious-problems
======
cs702
Stepping back for a moment, this thorough debunking of Reinhart and Rogoff's
flawed paper means that now there is NO evidence that government debt
exceeding 90% of GDP somehow negatively impacts growth.

Let me repeat that: there is NO EVIDENCE that more government debt causes
slower economic growth -- just theories.

I wonder what all the government deficit scaremongers will say to this!

\--

PS. For reference, the often-cited paper by Reinhart and Rogoff can be
downloaded at <http://www.nber.org/papers/w15639.pdf> and the new paper
debunking it can be downloaded at
[http://www.peri.umass.edu/fileadmin/pdf/working_papers/worki...](http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP322.pdf)

\--

PS#2. An Excel typo was partly to blame for Reinhart and Rogoff's errors!
Reminds me of the Excel typo that allowed the "London Whale" silently to rack
up billions of dollars in unexpected losses at JP Morgan:
[http://baselinescenario.com/2013/02/09/the-importance-of-
exc...](http://baselinescenario.com/2013/02/09/the-importance-of-excel/)

~~~
fauigerzigerk
There may not be empirical evidence for the magical 90% level, but we don't
need empirical evidence to know that at some point interest payments will
require highter tax revenues which will reduce disposable income and hence
consumption.

Obviously someone is on the receiving end of those repayments, but if that
someone is not putting money in the pockets of those same taxpayers and
instead decides to finance a power plant in Thailand then GDP will inevitably
suffer.

I'm not a government deficit scaremonger by any means. I think Krugman's (and
others') argument that the U.S. government can borrow very cheaply and should
therefore act in a countercyclical manner for the common good is plausible.
I'm also convinced that the crowding out argument is bogus in an economy that
suffers from too little demand whilst corporations are sitting on tons of
cash.

But we should not lose sight of the fact that interest rates are a highly
psychological affair. Once trust in the ability to repay debt gets eroded
things can get out of control very quickly. So we should be scared at least a
little bit.

That said, the U.S is probably the one entity on this planet that is furthest
away from that point. Even Japan with it's 245% debt/GDP ratio can borrow at
0.5% for 10 years whilst their currency is crashing and the central bank is
announcing a massive QE program twice the size of the U.S one.

But if the U.S ever gets to the point where Japan is now, that's when I'm
starting read up on agriculture or the hunter-gatherer diet.

~~~
podperson
There's obviously some point where having too much debt is bad, but if we go
back to the classical "country as household" oversimplistic analogy, I doubt
you'd find evidence that people who have mortgages over some magic value
relative to their income suddenly start getting smaller annual raises.

~~~
ajscherer
I prefer we not go back to any oversimplistic analogies. That's part of what
makes these debates so insufferable. A nation's economy isn't a household
budget. A company isn't a person. A nation isn't a person.

I don't really see much value in someone's axiomatic understanding of all of
economics premised on the belief that they are smarter than people who study
economics (even if they are; probably they are!). I'd much prefer to hear from
someone who is less smart, but who admits the subject is too complex for them
to fully understand and who can be bothered to go out and actually attempt to
measure something (rather than telling me what it must be).

I guess I'm saying I think I can learn more from an honest person than a smart
one. Now I'm questioning why I am wasting my time reading hacker news again.

~~~
mturmon
You don't read HN for nuanced and broadly-informed economics perspectives.

~~~
tomrod
Indeed. I often find myself wishing there were an "Economist Hacker News" of
sorts.

EJMR is the closest thing to HN for economists, and it's trash.

------
bernardom
Is The Reinhart-Rogoff Result Based On A Simple Spreadsheet Error?

Oh my goodness, no. That's the least of it. They took all Commonwealth
countries, found the periods where they had over 90% debt-to-GDP ratio, and
EQUAL WEIGHTED them regardless of length or country.

I won't do a better job of explaining this than the article: "U.K. has 19
years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent
growth rate. New Zealand has one year in their sample above 90 percent debt-
to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent,
are given equal weight in the final calculation, as they average the countries
equally."

Wow.

~~~
calinet6
That _in addition_ to the Excel error, this is just stupidity. I can't believe
it got as far as it did, except that certain groups really wanted to believe
its conclusions, even though they were false.

~~~
bernardom
Yup.

They also subjectively ignored the post-WW2 period for most countries;
coincidentally when countries had high debt and grew like crazy.

I bet that if you started with the desired results in mind for a study like
this, you could create a list of variables to try and pick the combination
that maximizes your metric.

Then provide a post-hoc justification for each choice.

For example: * debt-to-gdp 80%, 85%, 90%, 95%

* Ignore years after ww2 (the war was an externality)

* Don't ignore years after ww2 (why would we? they're years.)

* Ignore years after ww2 for countries that got aid from US (removing an externality)

* Ignore years after ww2 for countries that did not get aid from US (most countries did, don't want to mix the sample)

* Ignore years after ww2 for countries that were in the European theater (removing an externality)

* Ignore years after ww2 for countries that were not in the European theater (not affected by war like rest of globe)

* Ignore years after any war (externality)

* Weigh by population of country at time of study (lazy way to account for size of industry)

* Weigh by population of country by year (better way to accounts for size of industry)

* Equal weight for all countries (easy to explain)

* For each country, take periods of high debt-to-gdp and compare against periods without high debt-to-gdp; then compare countries equally (easy to explain-ish)

* Take each period of consecutive years with a high debt-to-gdp ratio and call each period one sample point. Average these inequal-length points together and compare against all years of low debt-to-gdp (Come on! Nobody would believe-- oh no.)

------
cletus
This actually isn't news. Questions have already been raised as this paper was
never peer reviewed [1] (Jan 2013), which states:

> According to their C.V.s [2], it's been published in the May 2010 issue of
> the American Economic Review, which is a special non-reviewed "papers and
> proceedings" issue.

So I really don't know why anyone listened to this in the first place other
than it furthered their pre-existing political agenda.

This is why any paper should be _required_ to release:

\- the _raw_ data supporting it;

\- the assumptions, exclusions and weightings made to produce the final data;
and

\- any code used for a model.

All of these issues are particularly problematic when it comes to climate
science.

[1]: [http://www.nextnewdeal.net/rortybomb/no-90-percent-debt-
thre...](http://www.nextnewdeal.net/rortybomb/no-90-percent-debt-threshold-
hasnt-been-proven)

[2]: <http://www.carmenreinhart.com/c.v./cv-in-pdf/>

~~~
JumpCrisscross
" _This actually isn't news_ "

This is news. "We can't replicate" a landmark study (yes, it was an
intercontinental landmark study) is very different from "we have found the
specific errors that make this study faulty".

------
lbarrow
Wait -- so apparently it's acceptable in economics to publish big important
papers with broad-reaching public policy implications without releasing the
data on which the paper was based? That would never fly in the sciences.

~~~
sigil
> That would never fly in the sciences.

Or would it?

[http://climateaudit.files.wordpress.com/2009/12/mcintyre-
grl...](http://climateaudit.files.wordpress.com/2009/12/mcintyre-grl-2005.pdf)

Regardless of what side you come down on w.r.t. this particular issue (and I
realize it's a sensitive one), the fact that global policy was influenced by a
paper that used secret, _buggy_ Fortran code to manipulate a data set is
extremely concerning. This is not good science.

Publishing data _and_ source code should be a requirement these days.

~~~
j_baker
I don't think it matters what side you take; the study you link to has long
been debunked.

<http://www.skepticalscience.com/broken-hockey-stick.htm>

~~~
bromang
There is no serious rebuttal or debunking of Mcintyre contained within that
post. Even if we ignore the details of that specific controversy, it is still
obvious that there are

1) big problems in the climate science community with regard to data and
replicability (see climateaudit for more than you could ever want)

2) massive statistical problems with reconstructions. See Mcshane and Wyner
2011.

------
martythemaniak
The most incredible and depressing aspect of this is that it will have no
impact whatsoever on policy makers, leaders or their supporters.

Can anyone imagine Paul Ryan or Cameron/Osborne coming out and admitting their
policies are based on nothing more than gut feelings unsupported by anything?
What about the countless pundits who've spent years squawking about austerity?
The notion is laughable.

~~~
Vivtek
Worse than that: the people who like a Ryan and his type actually respect gut
feelings _better_ than wonky data.

~~~
bob13579
With the computation, they still find 0-30 debt/GDP, 4.2% growth; 30-60, 3.1
%; 60-90, 3.2%,; 90-120, 2.4% and over 120, 1.6%

I wonder what you'll conclude with that data.

~~~
Vivtek
Why the ad hominem, bob13579?

------
trotsky
It's interesting to note that one of the authors of the original paper, Ken
Rogan, was the chief economist at the IMF 2001-2003. He also joined the group
of 30 in 2008, an economic policy organization that is very influential in
things like the Basel accords, IMF governance and matters of finance in
Brussels.

Many of these organizations rely on private data to support their policy
decisions, or rely on private analysis from similar organizations. That's hard
to criticize because at least some of it would cause serious harm to the folks
who provided it, or enable high finance players to front run policy actions to
huge profit.

But what to make of an insider like that refusing to release data that had no
market risk or legal restrictions in place. It's not hard to imagine that his
primary goal was support of an economic philosophy and would have been just as
happy to publish a paper that claimed high debt/gdp rations promote growth.

It certainly makes me wonder if this kind of approach is part of the culture
in some of these policy and international finance organizations. If the data
relied on by the IMF/ECB/etc as they've effectively reformed governments and
imposed major budget changes can't be made public, then you're highly reliant
on them to be ethical and extremely diligent.

If there's any significant amount of philosophy trumping science in the
european restructuring, one begins to wonder if some of the weaker euro
members are still actual democracies.

------
Uhhrrr
I see a lot of comments here to the effect that this means debt is a free
lunch now. Would that it were so - we could get rid of taxes, as well as
Medicare and Social Security withholding. And nix the Obamacare penalty. And,
of course, buy everyone a pony.

Sadly, ponies are a finite resource until such time as the government figures
out how to print more of them. Debt still has a multiplier less than 1 - far
less, for large amounts of debt.

All this article means is the magic number where debt starts to cause deep
hurting is somewhere above 90% of GDP.

------
TallGuyShort
Serious question - not trolling. Even if increasing the deficit does not
affect GDP (and I'm in no position to even comment on whether or not I think
it does) - how is that sustainable? I mean, AFAIK the argument behind
increasing government spending is as simple as "it solves problems" - it
provides help to those in need, affects the economy, etc. But why won't this
at some point collapse? And if it will at some point collapse, why do we think
politics will allow the government to behave any differently as we near that
time? So again - serious question - I fail to see how we can expect government
spending to grow without eventually consuming 100% of everyone's income or
collapsing entirely (and I understand that many people may consider the former
a good thing).

edit: And this may be because I don't know where the money comes from to begin
with. If I keep getting bigger and bigger loans and there's no way my income
will allow me to pay these loands back in the foreseeable future, then won't
everyone just cease doing business with me at some point? Does "debt" in a
government context act differently, and if so, why?

~~~
bloaf
Some historical notes:

<http://en.wikipedia.org/wiki/File:USDebt.png>

The US national debt during WWII was around 120% of GDP. In the years that
followed, that ratio fell to below 40%. However, we didn't appreciably pay off
our debts, the real dollar amount stayed a little over $2 trillion. We
accomplished this feat, of course, by substantially increasing the GDP. It is
easy to realize that it is fine for debt to continuously grow, so long as the
GDP grows faster.

Also, the only president to entirely pay off the national debt, Andrew
Jackson, triggered one of the deepest depressions in US history.

------
crapshoot101
This surprises me - Reinhart and Rogoff are both very well respected
economists, and neither is a culture warrior type - they've published enough
(Including "This Time Its Different", a great book to understand the history
of financial crises) that I almost wonder if there's more to this than meets
the eye at first glance. I realize the first tendency is to "burn the witch",
but I'd like to learn more.

~~~
3am
"both very well respected economists"

Not any more. This is a career killer. I wouldn't be surprised to see them
accepting posts with the American Enterprise Institute or Cato in short order.

EDIT: also, Barry Ritholtz is generally perceived as an honest broker on these
things, and his commentary is here: [http://www.ritholtz.com/blog/2013/04/did-
reinhart-rogoff-scr...](http://www.ritholtz.com/blog/2013/04/did-reinhart-
rogoff-screw-up-their-debt-research/)

~~~
crapshoot101
I realize most of HN is left-of-center, but Cato in particular is not fluff.
Specifically on the two, Rogoff was Chief Economist of the IMF (I spent a
summer interning when he was there), and no one considers either of these
economists as crazy-right wing types (the IMF, by American political
standards, is probably a centrist Democratic type, even if it does make some
very stupid calls for austerity from time to time).

There's always room for disagreement because economics is the dismal science
(as one famous line put it, Harry Truman wanted to find a one-handed economist
- so they wouldn't always answer "X could happen, on the other hand, Y could
happen), and answers aren't as binary as they sometimes are in the hard
sciences. I'm curious to see what Rogoff and Reinhart respond to this with.

Edit: thanks for the Ritholz piece - hadn't seen that. I certainly am not
claiming that there's no mistake - I just want to see what the defendants in
this have to say, so to speak.

~~~
3am
I wasn't casting aspersions on their previous credentials, but if anything
that magnifies the seriousness of this situation. It looks a lot like
unethical cherry picking of data (the 'coding error' is really of secondary
importance to me).

I know economics can be considered on the transition from hard to soft
sciences, and even within the field you have very soft-science schools like
the Austrians to very quantitative approaches like 'freshwater'. But that
doesn't seem to apply here. Maybe if they added caveats to their methodology
it would have been different.

I'm also not dismissing Cato or AEP out of hand, but nobody can deny that they
are partisan think tanks. Their primary purpose is to provide cover for policy
proposals, not original research.

------
johngalt
Debt and growth are obviously separate entities that are hard to correlate.
Intuitively it makes sense that debt doesn't inherently slow growth, and could
even speed growth.

Reducing the problem to a personal level, you borrow money to buy a good car
which enables you to work a higher paying job. This scenario makes the case
that debt causes growth. From a policy standpoint if you borrow money for long
term infrastructure and growth opportunities you could easily see debt as a
net positive.

OTOH, you run up your credit cards to buy a better TVs or to buy 'friends'. In
this instance debt can only lead to eventual poverty and ruin.

Which type of spending do you think is happening more often at a federal
level?

------
jl6
Isn't it more plausible that public debt is caused by government deficit
spending, which causes economic growth, but a temporary kind of growth that is
only as good as the government's ability to continue spending?

~~~
tunesmith
Well, that assumes the non-existence of "multipliers". The concept of a
multiplier is that if a government debt-spends on something, some of the
effects will be able to continue on their own power and contribute to economic
growth after the government spending stops. That would be economic growth that
wouldn't happen if the debt-spending didn't happen.

It's also sort of the heart of Keynesianism. The counterpoint is the more
intuitive certainty that if times are tough, everyone should tighten their
belts, including the government. That's sort of what drives the austerity
efforts.

~~~
jl6
Is there evidence for or against the existence of multipliers? Sorry if this
is a basic question.

~~~
tunesmith
That's the crux of the entire debate. There arguably is plenty of evidence of
multipliers, but the problem is that when your lab is the entire society,
there's no counterfactual - there's no control group. So you can never quite
say that in the absence of the debt spending, the multiplier effect wouldn't
have happened.

Anti-keynesians (hayekians?) point this out regularly and like to say that the
burden of proof is on the keynesians, which will of course be impossible for
the keynesians to ever prove. So that's where they get their handhold on
arguing against keynesian theory. (Note I'm only a hobbyist with this stuff so
my explanations may be way off - this is just my own sense of it.)

Now, there's something to be said for sometimes accepting something that is
not potentially provably false. I think Darwinian evolution is an example of
something that is not a strictly technical theory, but there's been such a
body of experimentation over the years that you pretty much have to accept it
as fact anyway.

And there's work done in modern Causality about how to tease out causality
from correlation in the absence of counterfactuals. I've been trying to
struggle through a causality textbook by Judea Pearl but it's really weird
advanced stuff.

------
ArkyBeagle
Dropping back the frame for a bit - Jeff Sachs is on EconTalk this week, and
he says what ( IMO ) should be the idea under scrutiny - employment prospects
for people without college degrees have declined quite a bit since 1973. The
present relatively high debt/deficit load was a result of an attempt to trade
debt/deficits for higher employment using a ... somewhat intentionally-blown
housing bubble. It didn't work. Something mysterious is "regulating employment
down" in the system, and we don't seem to have a good handle on it. Tyler
Cowen has posited a weakish "zero marginal product worker" hypothesis that
does not seem to be easily decidable. Sachs' idea is that this has been
developing since about 1973 and we haven't addressed it yet, and that this
failure is a failure grounded in weaknesses of social science itself.

I can't find a more evenhanded and clear statement of the problem than his.

------
danso
> _In a new paper, "Does High Public Debt Consistently Stifle Economic Growth?
> A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert
> Pollin of the University of Massachusetts, Amherst successfully replicate
> the results. After trying to replicate the Reinhart-Rogoff results and
> failing, they reached out to Reinhart and Rogoff and they were willing to
> share their data spreadhseet. This allowed Herndon et al. to see how how
> Reinhart and Rogoff's data was constructed._

What's amazing to me is that no one, until the researchers spotlighted here,
apparently thought to ask to see the data? Isn't this part of peer-review?

Things like this is why I love being part of the open-source community. People
may brag about and diss each other's code performance to an unnecessary degree
of hostility, but at least we can all check the code and run it for ourselves.

~~~
makr17
> Isn't this part of peer-review?

iirc, the paper wasn't published, let alone peer-reviewed. it was "discovered"
and used as a justification by people who may or may not understand the deeper
issues involved.

~~~
sirclueless
That's not true, it was published in the American Economic Review, which is
apparently a very well-respected journal.

[http://www.aeaweb.org/articles.php?hs=1&fnd=s&doi=10...](http://www.aeaweb.org/articles.php?hs=1&fnd=s&doi=10.1257/aer.100.2.573)

~~~
ukapu
I believe it was published in a section of the journal that does not require
peer-review.

------
jdrobins2000
Putting on my tinfoil hat, I wonder if this error was intentional or
unintentional? Was the errant conclusion known to be false by any who
propagated it? If so, by whom and to what end?

For example, perhaps the US and Euro governments wanted to justify some tough
measures of fiscal restraint and increase public support, and they wanted to
keep it from being delayed until collapse was impossible to avoid. (See, I'm
not totally jaded. But I can think of plenty of worse scenarios too.)

The "flaws" seem to be too large (and some deliberate) to be unintentional,
but maybe I give too much credit. I've just noticed too much misinformation
being spread by those who should know better, and coincidentally seem to
benefit the most from it. I'm suspending my judgement until I learn more, but
anyone else have any insights?

------
nhebb
This article give a better explanation:
[http://www.businessinsider.com/thomas-herndon-michael-ash-
an...](http://www.businessinsider.com/thomas-herndon-michael-ash-and-robert-
pollin-on-reinhart-and-rogoff-2013-4)

~~~
acqq
The source is actually:

[http://www.nextnewdeal.net/rortybomb/researchers-finally-
rep...](http://www.nextnewdeal.net/rortybomb/researchers-finally-replicated-
reinhart-rogoff-and-there-are-serious-problems)

and the paper (including the data and code files upon which the results are
based!) is:

[http://www.peri.umass.edu/236/hash/31e2ff374b6377b2ddec04dea...](http://www.peri.umass.edu/236/hash/31e2ff374b6377b2ddec04deaa6388b1/publication/566/)

~~~
nhebb
Thanks. I should have known better. I don't think Business Insider creates
original content (well, they do create some, but not much).

------
narrator
Mainstream economics is centered around recommending policies that ensure
bond-holders are paid. It all leads back to that. If there is too much debt
destroying the underlying economy causing bond interest payers to default,
lower rates. If rates go to zero, print money to pay the bondholders. If that
causes inflation raise taxes and cut spending to pay the bondholders (a.k.a
austerity), etc. The political economic dimension of the relationship between
bondholders and the people who pay there interest is an important missing
component from our understanding.

~~~
yekko
Hmm no, if there is inflation, enact a one time wealth tax and then cancel
those money.

Also, you can print money to increase supply, this is what the Asian miracle
is all about after all. Too bad they didn't print money to increase demand...

------
seoguru
Randy Wray's view: [http://www.economonitor.com/lrwray/2013/04/17/no-rogoff-
and-...](http://www.economonitor.com/lrwray/2013/04/17/no-rogoff-and-reinhart-
this-time-is-different-sloppy-research-and-no-understanding-of-sovereign-
currency/)

concluding paragraph makes so much sense:

"More than five decades ago, Abba Lerner gave the answer to this question. If
there are involuntarily unemployed (we would add underemployed) people it
means the deficit is too low. The government should either cut taxes or
increase spending. It is certainly debatable which one is a better policy, but
that’s beyond the scope of this paper. When is the deficit too large? When
it’s over 3%, 7%, 10%? Again, there is no magic number and anyone who comes up
with a universal number simply misunderstands the modern monetary regime and
macroeconomics. In opposition to magic, Lerner proposed “functional
finance”—the notion that the federal government’s budgetary outcome is of no
consequence by itself, but rather, what is important is the economic effects
of government spending and taxing. When total spending in the economy,
including government spending, is more than what the economy is able to
produce when employed at full capacity, the government should either lower its
spending or raise taxes. A failure to do so will lead to inflation. So
inflation is the true limit to government spending not lack of financing.
Government debt is merely the result of government deficit and hence the same
applies to debt as well."

------
kybernetikos
Are we describing running the same formulae on the same numbers as
'replicating' these days?

Did real economists always consider these results provisional/dubious/bogus
and the fact that they were used as the basis of policy is to the shame of our
policy makers and press, or is the field of economics so messed up that
research based on schoolboy errors can become the accepted view within the
field?

------
ColinWright
Other discussion: <https://news.ycombinator.com/item?id=5559483>

------
api
It seems clear to me that government debt in modern fiat-credit economies
isn't really debt in the same sense that private debt is debt. It doesn't
behave like private debt. I don't think debt is even the correct term for it.
Maybe we need a new one.

------
jaekwon
Where do I find the paper that links GDP to sustainability or quality of life?
You can have a compulsive debt driven society and still have strong economic
activity, no? Or is "economic growth" really an indicator of economic
sustainability?

------
xenonite
Official response to the critique by Reinhart and Rogoff:
<https://news.ycombinator.com/item?id=5560829>

------
jackcouch
I think this is another example of why we must start with apriori approach to
economics (and all learning for that matter) and only resort to posteriori
methods as a secondary methodology. In this case we can prove logically that
inflation reduces the investment capital available and that will always result
in a decrease of production. If that is accepted arguing about how bad we can
make something before X milestone seems a little less important.

------
afterburner
The point is: don't copy Europe's austerity disaster.

------
helmut_hed
_This is also good evidence for why you should release your data online, so it
can be properly vetted_

Reinhart and Rogoff may reach exactly the opposite conclusion, given the
embarrassing publicity. For me this is an illustration of why publishing just
your conclusions without data (or code, or whatever details are germane to
your field) is so common.

------
pyalot2
They accidentially, the whole economy.

------
seoguru
Mike Norman called out the flaws in Reinhart and Rogoff a while back:
[http://www.youtube.com/watch?v=JkKxN1H1P10&list=UUZhuQXt...](http://www.youtube.com/watch?v=JkKxN1H1P10&list=UUZhuQXtpH2dXeEAX_5MKGow&index=4)

------
ajanuary
I wonder if this sort of error is less common in 2007+ thanks to the addition
of tables.

~~~
pinko
As ernardom points out above (below? predict-o-karma where are you!), this
involved much more intellectually serious errors than just the calculation
bug. They both missed (or possibly cherry-picked) countries and misweighted
them.

~~~
calinet6
I would venture to guess that they'd be entirely incompetent at whatever
software they attempted to use.

------
mrcactu5
I enjoyed reading "This Time is Different" I think their discussions of debt
has motivated us to look at this concept in more depth. Maybe we can improve
on their crude excel spreadsheet analysis. Then someone should do it!

------
kochb
> In fact, [the past] tells us that a larger deficit right now would help us
> greatly.

That conclusion is quite a jump from Reinhart-Rogoff is flawed.

------
auctiontheory
Apparently economics is harder than chess.

------
bob13579
The correction actually bolsters the claim that more debt leads to lower
growth.

0-30 debt/GDP, 4.2% growth; 30-60, 3.1 %; 60-90, 3.2%,; 90-120, 2.4% and over
120, 1.6%

~~~
anigbrowl
there's a big difference between claiming that >90% debt leads to (slower)
growth of 2.2% and claiming that it results in (negative) growth of -0.1%. In
the first scenario, you don't grow as quickly as you'd like, in the second
scenario your economy is actually shrinking and you're entering a death
spiral.

~~~
bob13579
You're setting up a straw man. That's not my argument. The argument is that
the data bolsters the claim that more debt correlates with slower growth.

~~~
anigbrowl
No I'm not. I know what your argument is, and it's disingenuous. It's like
saying that you only have one pet in your apartment while glossing over the
fact that the pet is an elephant.

Nobody disputes the idea that more debt can result in slower growth. But
there's a huge difference between saying that growth with high debt levels has
historically been about 2.2% (compared to a more desirable 3%+ with lower
debt) and saying that high-debt-growth has been -0.1%. That's an error of 220%
in the wrong direction.

------
trhtrsh
Does economics have peer-review? Excel is tolerated in an academic journal?

~~~
rayiner
What do you mean "Excel is tolerated in an academic journal?" Excel is a
perfectly fine tool for doing all sorts of data analysis without knowing how
to program. This same error could've been done in a "real" programming
language just by messing up some subscripts.

~~~
minimax
It's good for doing one-time analyses, but hard to automate when you have many
inputs that are updated as time passes, or if you need to feed the output of
one spreadsheet into another.

Tangentially related: I've been thinking recently about how hard it would be
to teach a real programming language to Excel users. They would already have
some grasp of functions, arrays, and variables. I think the analogues might
have some pedagogical value.

~~~
chernevik
I teach a short session on moving analysis from Excel to SQL. Many power Excel
users make the jump pretty smoothly. Once you get them thinking about a work
flow moving from one table to another, they get it.

But we're talking here about some very bright people accustomed basically
hacking the one thing they know to get results. It's a subset of "Excel users"
generally.

~~~
jwb119
Is this online anywhere? I'd be interested in checking it out.

~~~
chernevik
No, but hit me at the email in my profile and I'll send you the deck. If
you're in NYC I'll sit down with you.

~~~
jwb119
Great, thanks! Though I'm not seeing an email in your profile.

~~~
chernevik
Huh. I've filled the field, it doesn't display. Whatever.

It's my handle, at gmail.com

