財政赤字過剰による財政赤字削減の国民生活を直撃する国家予算削減の緊縮財政政策への疑問。
La teoría del exceso de deuda pierde un asalto
La revisión de un influyente estudio de Reinhart y Rogoff reactiva el debate sobre la austeridad
Alejandro Bolaños 21 ABR 2013 - 00:06 CET
The debt overhang theory loses an assault
The review of an influential study of Reinhart and Rogoff reactive debate on austerity
Alejandro Bolaños 21 ABR 2013 - 00:06 CET
Not to be an eagle to find the connection between the European Economics Commissioner, Olli Rehn, the British treasury minister, George Osborne, and Republican Congressman Paul Ryan, who opted unsuccessfully for vice president of the USA. All three are well known to prioritize cutting the public deficit. All three used a study of two Harvard economists Carmen Reinhart and Kenneth Rogoff, to give their positions packaging.
So far, nothing unusual: Reinhart and Rogoff (former chief economist of the IMF), had well-earned reputation by this time is different, a 2009 book in which rebuilding financial crisis, and its implications, since 1800. The study chanted Rehn and Ryan Osborne, published a year later, concluded that growth weakens abruptly if public debt exceeds 90% of GDP. It offered a magic number, a candy for the champions of austerity, who savored again and again.
"I firmly believe in research such as Rogoff and Reinhart show that, if you reach a certain level of public debt, increasing deficits and debt do not generate growth, but that harm", recited in October the German Finance Minister, Wolfgang Schäuble. But this week, another study from the University of Massachusetts, revealed that data omitted Harvard economists, who used a highly questionable methodology. And the debate over whether austerity is solution combustion or conviction entered.
In his research, transfer 90% of public debt in GDP leads to crash
To tell this story, very popular these days in the Assembly of the IMF, university departments and academic blogs, should be taken away. In this case, it is best placed in the antipodes. Yes, in New Zealand. Because the data are in this country which, according to Professors Thomas Herndon, Michael Ash and Robert Pollin, they shake the theoretical edifice constructed by Reinhart and Rogoff.
Harvard economists analyzed the relationship between growth and debt from the database that had been developed. Among other things, fixed their attention on what happened with 20 advanced countries between 1946 and 2009. And came to the conclusion that when public debt crosses the "threshold" of 90% of GDP, the result is an increase "significantly lower" before reaching the threshold of debt, GDP advancing at an annual rate ranged between 3% and 4%, after transferring it, the average falls to -0.1%.
Three years later, the professors of the University of Massachusetts found strange things in New Zealand: Rogoff and Reinhart use the data from 1951, when the public debt in this country exceeded 90% and GDP fell by 7.6%. But not those of 1946-1949, which also exceeded the threshold of 90%, although high growth rates. If they had, the change in GDP of New Zealand would have been +2.6% rather than -7.6%.
The consequences of this omission, is multiplied by the methodology used by Rogoff and Reinhart. Because what we decided was to average growth every year in which a country exceeded 90% debt. That is, the 2.4% average growth recorded UK during the 19 years in which debt crossed the threshold have the same weight as the -7.6% in one year for New Zealand.
"I firmly believe in studies such as Reinhart and Rogoff" proclaimed Schäuble
In addition, the spreadsheet program Excel that employed Rogoff and Reinhart mistakenly left out data from five countries. It has the least impact, but what is striking at elementary mistake. After the review, the faculty at the University of Massachusetts concluded that the average growth in years with a debt greater than 90% would have been 2.2% rather than 0.1%, as Rogoff and Reinhart kept. "This should lead us to revise the austerity plans in Europe and the United States," they conclude Herndon, Ash and Pollin, advocates increasing government spending to combat mass unemployment in recession.
The Rogoff and Reinhart study published in American Review of Economics (AER), a prestigious scientific journal. But the errors and omissions were detected only three years later, when Harvard economists agreed to share your spreadsheet with teachers of Massachusetts. "The AER is very strict in their standards of publication. Apart from a preliminary evaluation of the articles, always obliged to make public the data and software you use, "says Jesús Fernández-Villaverde, professor at the University of Pennsylvania. But he qualifies, the Rogoff and Reinhart study was published in a special issue, where these requirements do not apply. "It is a number that summarizes the presentations of the annual conference of the American Economics Association. Is to raise provocative ideas, even if they are half-developed, "he adds.
For Fernandez-Villaverde, the "only real mistake" occurred in the spreadsheet. Besides are female, the use of the popular Excel is much less common among university researchers. "We usually use more serious statistical languages". He believes that the decision to omit some countries can defend themselves "if there is a problem with the quality of the data." And that the methodology used (giving equal weight to each country) is a "test", but its obvious problems "could have been minimized with more sophisticated statistical techniques."
The professor of the University of Pennsylvania downplays the importance of the review of the influential study Rogoff and Reinhart in the debate on austerity. "Politicians who wanted to justify that position would have found other reports that say things like" he emphasizes.
In an email sent to various media, Reinhart and Rogoff assume the "mistake" in handling the spreadsheet. But they said it does not alter the "central message" of his study. And reject the rest of criticism. "We are confident that the review authors did not want to imply that manipulate data to exaggerate our results," Strike.
Harvard economists justify not include data from New Zealand between 1946 and 1949 in the 2010 study because they had not had time to "test the compatibility and quality of that data," something they did do later in other jobs. And defend the methodology they chose, but opted for another approach in a subsequent study.
In this study, last year, the differences detected by Rogoff and Reinhart in average economic growth for countries above (3.5%) and below 90% debt (2.4%) are very similar to those calculated by Massachusetts teachers in their review (from 3.2% to 2.2%). "It is extremely wrong file an annual difference of 1% in high debt episodes lasting between 10 and 25 years as a small" Rogoff and Reinhart added.
But what no longer occurs, or in the review of teachers from Massachusetts, or the latest study by Harvard economists themselves, is that precipice in growth by passing the 90% debt. In the many speeches and articles that starred in the last three years, Reinhart and Rogoff do not championed extreme austerity, even warned against excessive tightening in Europe. But he warned of the implications of increasing public spending (and debt) to revive the economy.
The first response of governments to the Great Recession of 2009 was, indeed, unprecedented fiscal stimulus. In May 2010, when Reinhart and Rogoff, published their article, the tide had changed: the markets turned their attention to European countries with low growth prospects and high debt. The answer, especially in the euro zone was to prioritize deficit reduction, leaving the public expenditure policy. After three years of intensive austerity, the wind of the debate turns to roll. And the critical revision of Reinhart and Rogoff study is now a caramel taste with relish supporters of a massive state intervention.
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