I kind of feel like this is the 90s and Bill Clinton is explaining what the definition of is is. On Money Illusion, the commentator Patrick Sullivan is making heavy weather of Hamilton's claim that all R-mistake amounted to was a rounding error:
Patrick why am I pigeonholed into only being allowed to discuss this one facet of Henderson’s piece?"
‘If you want me to discuss the excel error and just how big or small it is fine.’
"Do you suppose that’s why I asked you, ‘So Mike, is Hamilton wrong about that?’?
"And why did you not answer me, but instead pose as a martyr? When you finally get around to saying something about what Hamilton actually did write about the Excel error (in a later post!), all you can offer is;
"Which is false, as Hamilton clearly said they’d made a ‘numbskull error’
‘Despite all the many words Hamilton expended on it at the end of the day it was a material difference.’
‘…it turns out it [the error] would only have changed the estimate they reported by a few tenths of a percent.’
So, the dispute between you and Hamilton is whether ‘a few tenths of a percent’ is, or is not, ‘a material difference’.
"When I see someone go to the lengths you have gone to cover up this, I’m pretty sure that person knows he’s skating on thin ice."
Patrick why am I pigeonholed into only being allowed to discuss this one facet of Henderson’s piece?"
You can discuss anything you like, but when you make a blatantly false statement like; ‘This 90% rule was all compliments of an Excel error.’, you’re asking to be corrected.
‘If you want me to discuss the excel error and just how big or small it is fine.’
"Do you suppose that’s why I asked you, ‘So Mike, is Hamilton wrong about that?’?
"And why did you not answer me, but instead pose as a martyr? When you finally get around to saying something about what Hamilton actually did write about the Excel error (in a later post!), all you can offer is;
‘As far as the Excel error basically Hamilton is trying to say that R-R are basically blameless.’
"Which is false, as Hamilton clearly said they’d made a ‘numbskull error’
‘Despite all the many words Hamilton expended on it at the end of the day it was a material difference.’
And ‘the many words Hamilton expended’ were;
‘…it turns out it [the error] would only have changed the estimate they reported by a few tenths of a percent.’
So, the dispute between you and Hamilton is whether ‘a few tenths of a percent’ is, or is not, ‘a material difference’.
"When I see someone go to the lengths you have gone to cover up this, I’m pretty sure that person knows he’s skating on thin ice."
As should be clear from the above link, it's not me who's on thin ice but Hamilton himself whose "defense" in his most recent post amounted to Krugman is wrong to claim that R-R's bad 2010 paper means their 2009 book is also no good, when Krugman has made the point of emphasizing that the book remains a very important work that was dead on that financial recessions are deeper and longer.
With such blatant dishonesty how can we take anything he has to say seriously? Still, clearly Patrick is certain that there's some smoking gun in Hamilton's claim that the Excel error was just a little rounding error. So let's look at that.
I think it's "a dispute" between Sullivan, Sumner and Hamilton on the one side, and just about everyone else on the other as to what constitutes "just a little error." It is just "a few tents of a percent? If so, then it's barely worth discussing right?
"Is this a lesson that any of the statements zapping across the Internet over the last two weeks do anything to undermine or dismiss? You could only imagine that the answer might be yes if you've just been following the controversy at the level of headlines and soundbites and ignoring analyses of the substance of the controversy. "
This is Hamilton relitigating the 2009 book that everyone including Krugman loves-except maybe Sumner-and no one-not even Krugman-is now saying is no good because their 2010 paper was no good.
"If that's the case, please get yourself informed by reading thisand this. To briefly summarize the facts that you'll find developed more fully there, some researchers at the University of Massachusetts have challenged one tiny detail of one follow-up study by Reinhart and Rogoff having to do with an issue that I have yet to even mention so far in today's discussion. That dispute concerns a measure of the correlation between sovereign debt levels and GDP growth. I say it is a tiny detail, because the dispute is completely restricted to just one of six different summaries of three different data sets in that one particular paper. The Massachusetts researchers correctly noted that there is an error in the spreadsheet which, if corrected, would have changed the number Reinhart and Rogoff should have reported for that one statistic by a few tenths of a percent. Bigger changes in that one statistic could be obtained if one adds some additional data and makes what I regard as a questionable change in methodology, but even with all the changes they want to make, the results preferred by the University of Massachusetts researchers are in fact very similar to the other 5 dataset summaries that will be found in Reinhart and Rogoff's original paper, as well as a subsequent analysis of expanded data that Reinhart and Rogoff published in 2012 (which again the Massachusetts scholars did not mention or discuss)"
Actually what this amounts to is this. In the 2010 paper is that they claimed that countries that exceed 90% debt levels have historically shown a mean level of -.0.1% growth. Now R-R and their apologists are trying to say that the 90% number was never a big deal, but in fact it was the intellectual edifice of austerity both in the GOP Congress and Oli Rehn and friends over in the EU.
It turns out that R-R left out a couple of countries in their mean which makes a material difference-not a few tenths of a percent. R-R pooh-pooh the very idea that they could have selected the countries to exclude to bias their results:
However, it's a little convenient that the only countries mistakenly excluded are all high growth countries that had lots of debt after WWII and yet continued to grow. Just a little coincidence.
When you add these few countries back in the mean growth rate for over 90 goes from -0.1% to 2.2%. If this is what Hamilton and Sullivan call a small rounding error we speak different languages. I'm basing these numbers on a chart Hamilton uses.
Mike Konczal explains this little coding error in detail:
"As Herndon-Ash-Pollin puts it: "A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49...This spreadsheet error...is responsible for a -0.3 percentage-point error in RR's published average real GDP growth in the highest public debt/GDP category." Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above)."
There were also a couple of big problems with the paper beyond the coding error:
"Reinhart-Rogoff use 1946-2009 as their period, with the main difference among countries being their starting year. In their data set, there are 110 years of data available for countries that have a debt/GDP over 90 percent, but they only use 96 of those years. The paper didn't disclose which years they excluded or why."
"Herndon-Ash-Pollin find that they exclude Australia (1946-1950), New Zealand (1946-1949), and Canada (1946-1950). This has consequences, as these countries have high-debt and solid growth. Canada had debt-to-GDP over 90 percent during this period and 3 percent growth. New Zealand had a debt/GDP over 90 percent from 1946-1951. If you use the average growth rate across all those years it is 2.58 percent. If you only use the last year, as Reinhart-Rogoff does, it has a growth rate of -7.6 percent. That's a big difference, especially considering how they weigh the countries."
So just a little rounding error? Contrary Hamilton, Sumner, and Sullivan, most of R-R's peers say no, not even close.
P.S. Yes, my website has a little different look now. I think you'll find it's a little more user friendly-the beauty of finally getting a web consultant.
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