Frances Coppola — Reframing Reinhart & Rogoff

I don't propose to comment on the details of the case. Suffice it to say that Reinhart & Rogoff were wounded by a paper that showed that their data was flawed. Theydefended themselves, and were also defended by numerous economists around the world who argued that although the data might be flawed, the economic analysis justified their conclusions. But the next day, the Rortybomb blog delivered the killer punch. Econometric analysis by Arindrajit Dube demonstrated that even with good data, the economic analysis was flawed and the conclusions unjustifiable. High public debt cannot reliably be shown to cause low growth. But low growth can reasonably reliably be shown to cause high public debt. 

This is a no-brainer, actually. There are two reasons for this....

However, I did say that I was reframing this debate. And that is what I shall now do. You see, Reinhart & Rogoff completely missed the point. Even if their analysis was right, even if the data were reliable, it would still be unhelpful. They are looking at the wrong metrics. 

Coppola Comment
Reframing Reinhart & Rogoff
Frances Coppola