“If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.”
One of the fundamental ideas behind science is that results must be able to be replicated, and that peer review is essential. Three years later, and we're just now finding out that these guys made a typo (if you're charitable enough to believe that's what it was). If you didn't already think the state of economic ‘science’ was bad…
One of the mistakes is thinking that Economics is in a fact a science. It is not.
Second, I think it is only right that economic decisions that influenced the lives of millions should be based on political principles, and not technical ones. The latter only give you things like the long-term suicidal one-child policy, and you also don't get anyone to blame, while the first at least give you the chance to change course mid-way and a sort of feedback mechanism.
Also, using 50-year cycles in order to determine long term economic "truths" is a joke.
The average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim].
That magnitude of error will bring up questions of intentional manipulation. Sure, I can understand a math error in your Excel table leading to a minor problem, but excluding post-World War 2 years seems like blatant manipulation.
Technically, it's the same data as before, so it's not the same thing as when you replicate an experiment in other fields, by going and getting more data.
"Failure to replicate" means "we didn't find it happening when we checked again," not "we couldn't figure out how they screwed up their analysis".
Sometimes people will distinguish between "replicating a result" and "reproducing an experiment" – with the differences more prominent when you are dealing with straight data. Replicating a result simply means you confirm that the results aren't made up – you start with what they say they started with, you get the result they say. Reproducing an experiment might mean working from their conclusions, not trying to repeat every detail, and seeing if you come up with the same result – you might not if you mess up the experiment, but you might also confirm the interpretation of the result because you've eliminated aspects that the theory considers insignificant.
With results derived strictly from data this is a clearer line, as repeating the process exactly is quite possible (the spreadsheet in this case is the "process"). This might seem trivial, but it's pretty common that even repeating the purported process is very hard.
It is news. The three criticisms the article raises are new and depend on their having gotten access to the spreadsheet.
Even though the author implies at the end that the Excel error is the least of the three, it's the perfect soundbite for a debate which, as you say, is political. Anyone can understand it (hey! I've made a mistake like that, those guys are as dumb as me) and in the symbolic language that governs such battles it's far more lethal than any substantive criticism could be [1]. Political hammer for a political nail.
Harvard should fire the two professors. They committed academic malpractice by knowingly publishing bad data in a non-peer reviewed publication in order to influence the political debate.
Just print money to fund economic activity... Instead of print debt to create money and give them to the rich to buy our public debt. (Gov spending then funnels to large corporate and..)
Money is being printed depending upon your definition of money. When the treasury spends in excess of tax revenues which is essentially all the time, by law they must issue a treasury security and "sell" it. This security gets sold to the primary dealer ( think big Wall Street firms). Treasury then gets account credited at Fed in the amount of security sale. Treasury then spends the money back into the economy. This "money" is called reserve balance ( federal funds/vertical money/high powered money). Since the Fed's job is to execute monetary policy ( i.e. price of money) by directly manipulating the federal funds rate, they often buy back that treasury bond from the primary dealer and remove the excess reserves else they lose grasp of the federal funds rate. Would be nice to get rid of this obfuscated gymnastics between Fed, Treasury, and Wall Street, and simply have direct printing of money as per congressional budgets passed by Congress. The current system causes mucho confusion and the illusion that the government is self funded. How can issuer of a fiat currency be involuntarily insolvent?
edit: With direct printing, the fed funds rate would go to zero. No need for Treasury Bonds or "borrowing" per se.
Taxes establish a demand for the currency. Government wants to provision itself. How does this happen with fiat currency? Government levies a tax and then offers employment in exchange fiat currency which is the only means of settling the tax liability. Without the tax it would be hard for a fiat currency to take hold over other alternatives.
One of the fundamental ideas behind science is that results must be able to be replicated, and that peer review is essential. Three years later, and we're just now finding out that these guys made a typo (if you're charitable enough to believe that's what it was). If you didn't already think the state of economic ‘science’ was bad…