Author Topic: Anti-austerity?  (Read 3710 times)

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Offline Dilmah G

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Not sure if you gents have seen this.

Basically, a bloke was doing an econometrics assignment, and...

Quote
...Herndon became instantly famous in nerdy economics circles this week as the lead author of a recent paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," that took aim at a massively influential study by two Harvard professors named Carmen Reinhart and Kenneth Rogoff.  Herndon found some hidden errors in Reinhart and Rogoff's data set, then calmly took the entire study out back and slaughtered it. Herndon's takedown — which first appeared in a Mike Konczal post that crashed its host site with traffic — was an immediate sensation. It was cited by prominent anti-austerians like Paul Krugman, spoken about by incoming Bank of England governor Mark Carney, and mentioned on CNBC and several other news outlets as proof that the pro-austerity movement is based, at least in part, on bogus math.

We spoke to Herndon about his crazy week, and how he's planning to celebrate his epic wonk takedown.

"This week has been quite the week," Herndon told us in a phone call from UMass Amherst's campus. "Honestly, I was not expecting at all the kind of attention it has received."

Herndon, who did his undergraduate study at Evergreen State College, first started looking into Reinhart and Rogoff's work as part of an assignment for an econometrics course that involved replicating the data work behind a well-known study. Herndon chose Reinhart and Rogoff's 2010 paper, "Growth in a Time of Debt," in part, because it has been one of the most politically influential economic papers of the last decade. It claims, among other things, that countries whose debt exceeds 90 percent of their annual GDP experience slower growth than countries with lower debt loads — a figure that has been cited by people like Paul Ryan and Tim Geithner to justify slashing government spending and implementing other austerity measures on struggling economies.


Before he turned in his report, Herndon repeatedly e-mailed Reinhart and Rogoff to get their data set, so he could compare it to his own work. But because he was a lowly graduate student asking favors of some of the most respected economists in the world, he got no reply, until one afternoon, when he was sitting on his girlfriend's couch.

"I checked my e-mail, and saw that I had received a reply from Carmen Reinhart," he says. "She said she didn't have time to look into my query, but that here was the data, and I should feel free to publish whatever results I found."


Herndon pulled up an Excel spreadsheet containing Reinhart's data and quickly spotted something that looked odd.

"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.


Herndon was stunned. As a graduate student, he'd just found serious problems in a famous economic study — the academic equivalent of a D-league basketball player dunking on LeBron James. "They say seeing is believing, but I almost didn’t believe my eyes," he says. "I had to ask my girlfriend — who's a Ph.D. student in sociology — to double-check it. And she said, 'I don't think you're seeing things, Thomas.'"...

As a non-economist, I wanted to see what people's opinions were on this. What's the case of the austerity movement now?

 

Offline headdie

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hmmm be interesting to see where this goes, especially with situations like in southern europe
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Offline BloodEagle

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"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

 :wtf:

Not to jump on the conspiracy bandwagon (for either side), but how in the carp does someone (who is supposedly quite good at this sort of thing) make such a mistake?

  

Offline headdie

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Quote
"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

 :wtf:

Not to jump on the conspiracy bandwagon (for either side), but how in the carp does someone (who is supposedly quite good at this sort of thing) make such a mistake?

by being tired and processing a ****ton of information, probably having had too much caffeine that night, just to get the damn report finished
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Quote
"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

 :wtf:

Not to jump on the conspiracy bandwagon (for either side), but how in the carp does someone (who is supposedly quite good at this sort of thing) make such a mistake?

Never attribute to malice that which can adequately be explained by stupidity. The error in question was that an Excel spreadsheet was being used to average 8 or so values, and for whatever reason -- someone clicking and dragging wrong, data being added and the formula not being updated -- only the first 5 of them were actually counted. If you've ever used Excel it's scarily plausible.
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Offline headdie

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"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

 :wtf:

Not to jump on the conspiracy bandwagon (for either side), but how in the carp does someone (who is supposedly quite good at this sort of thing) make such a mistake?

Never attribute to malice that which can adequately be explained by stupidity. The error in question was that an Excel spreadsheet was being used to average 8 or so values, and for whatever reason -- someone clicking and dragging wrong, data being added and the formula not being updated -- only the first 5 of them were actually counted. If you've ever used Excel it's scarily plausible.

tbh its an inherent point of pebkc when full attention is not given is any spreadsheet software
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I wouldn't simply blame it on user error when Excel itself has a number of design flaws that make it easier to make those mistakes and harder to audit for them.
The good Christian should beware of mathematicians, and all those who make empty prophecies. The danger already exists that the mathematicians have made a covenant with the devil to darken the spirit and to confine man in the bonds of Hell.

 

Offline MP-Ryan

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I saw that last week.  Interestingly, the two famous economists are standing by their conclusions, notwithstanding the errors in their data.
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Offline Luis Dias

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Just go through Krugman's blog and you'll see that the document in question is just a myriad of bad terribadness gone just wrong on many levels.

And yeah, I'm suffering due to, amongst other things, these incompetents and the other incompetents who quoted these buffoons as "scientific evidence" that we had to go through Austerity Now! to save us from the apocalypse. Or something. It's cases like this that make me think the capital punishment should be available to the judicial system.

 

Offline General Battuta

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Another case where transparent science could've done a lot to help.

 

Offline Luis Dias

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I'll refrain to respond to that, I'd be called "anti-science" in no time.

 

Offline General Battuta

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Posting your spreadsheet along with your paper doesn't seem like a difficult step. I'm curious what objection you could have.

 

Offline Luis Dias

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Oh that. That's science fiction, and I'm always in favor of science fiction. I was just taking your comment and mentally applying it to what I think most (soft) sciences have been through for the past 30 / 50 years.

 

Offline General Battuta

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Posting your spreadsheet along with your paper doesn't seem like a science fictional step. I'm curious why you think it is.

 

Offline Dilmah G

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As am I.

I saw that last week.  Interestingly, the two famous economists are standing by their conclusions, notwithstanding the errors in their data.
Indeed, I'm going to try and find their statements and see what logic they've got for this one.

 

Offline Luis Dias

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Posting your spreadsheet along with your paper doesn't seem like a science fictional step. I'm curious why you think it is.

It is science fiction in the sense that rarely it happens (if ever). Scientists are all amazing, except for the fact they are people. And people are usually (and for good reason) paranoid, and they all like to keep their "Secret Sauce" for themselves. If making the lives of people who are to audit your work worse, then all the better for their careers.

As am I.

I saw that last week.  Interestingly, the two famous economists are standing by their conclusions, notwithstanding the errors in their data.
Indeed, I'm going to try and find their statements and see what logic they've got for this one.

Smoke and mirrors. I've seen that kind of behavior elsewhere in many other fields. Basically every field which extensively uses statistics showcases this behavior in droves.

 

Offline General Battuta

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Posting your spreadsheet along with your paper doesn't seem like a science fictional step. I'm curious why you think it is.

It is science fiction in the sense that rarely it happens (if ever). Scientists are all amazing, except for the fact they are people. And people are usually (and for good reason) paranoid, and they all like to keep their "Secret Sauce" for themselves. If making the lives of people who are to audit your work worse, then all the better for their careers.

I think that's largely true, but the tide may be changing. A bunch of young scientists both at MIT (my last academic station) and now at NYU are very enthusiastic about the open science movement.

And yeah, statistics in the social sciences are deeply ****ed up.

 

Offline Luis Dias

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Anyways, we are drifting from the main point of this thread, which is what kind of torture do these creeps and those who rested their own austerity agendas on this sloppy work (not only *this* sloppy work...) are we going to decree.

 

Offline Aardwolf

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What kind of torture do these creeps [...] are we going to decree.

Uh... what?