"Rogoff-Reinhart data scandal"
This week, here's what we found out: that very convincing data that Reinhart and Rogoff presented was wrong. Their research was messily done with spreadsheet errors. Here's the gist: Reinhart and Rogoff said that economies with more than 90% debt have economic growth of -.1%, which would put them at risk of recessions.
In fact, new research finds, those countries grow their economies by 2.2% a year. To put that in perspective, that's more growth than the US has had for quite a while. Rogoff and Reinhart's research on debt and austerity finally collapsed under scrutiny of a team from the University of Massachusetts-Amherst, which received the numbers from the economists. Reinhart and Rogoff replied, saying, in essence that some of their data may have been wrong, but their gist was right. This isn't exactly satisfying. If the numbers aren't really right, why would the conclusion be correct?
The travails of Rogoff and Reinhart show one thing conclusively: we put too much trust in economics to tell us how to run the country. Economics cannot actually bear this burden. It is largely a science of educated guesses. Economics is a useful science, but it is not an infallible one. It is, in particular, an unreliable policy tool. . . . .This is a little old, but I should have posted it earlier.