The old guard trying to stay relevant and failing — Bill Mitchell

So just a brief comment on the latest fiasco from ‘Mr Spreadsheet’ Kenneth Rogoff as he stares into the abyss of irrelevance and is trying to hand on like grim death to any shred of credibility. He has none. If he ever did, the spreadsheet scandal finished it. But he never did anyway....

Bill Mitchell – billy blog
The old guard trying to stay relevant and failing
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Discredited academic dinosaurs continue to seek relevance

As many mainstream macroeconomics try to reinvent themselves after their reputations were trashed during and in the aftermath of the GFC, some are still trying to stay relevant by recycling the usual trash about deficits, public debt and bond yields that defines the New Keynesian orthodoxy in macroeconomics. That approach has been emphatically exposed as fake knowledge by the fact that none of the predictions that can be derived from that framework have proven to be accurate. On December 9, 2019, the UK Guardian took a rest from imputing anti-semitist motives to Jeremy Corbyn and published a sort of dinosauric-type article from Kenneth Rogoff – Public borrowing is cheap but ramping up debt is not without risk. Yes, the same character that claimed during the crisis that there was a public debt threshold of 90 per cent of GDP, beyond which, governments would face insolvency. When it was discovered the spreadsheet they had used to come up with that conclusion had been incompetently (or fraudulently) manipulated and that the actual data did not show anything of the sort, Rogoff should have slunked off and shut his mouth forever. But that is not the way these characters operate. Memory is short. Their position as an agent for their elites is well paid. And so they keep recycling the nonsense. Eventually, their influence will decline. But as Max Planck noted in 1948 “Die Wahrheit triumphiert nie, ihre Gegner sterben nur aus”, which has been reduced to ‘science advances one funeral at a time’, which is not a verbatim translation but an accurate depiction of how change is slow to come to the academy....

Bill Mitchell – billy blog
Discredited academic dinosaurs continue to seek relevance
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The ladder of social science reasoning, 4 statements in increasing order of generality, or Why didn’t they say they were sorry when it turned out they’d messed up? — Andrew Gelman

Reinhart and Rogoff. Why didn't they take responsibility, a student asked Andrew Gelman. Statistics professor Gelman answers:  It wasn't actually about the data in the minds of R & R, so being wrong about it apparently made no significant difference to them. Empirical result? Meh.

Rationalists, or just ideologues with a cognitive bias?

Statistical Modeling, Causal Inference, and Social Science
The ladder of social science reasoning, 4 statements in increasing order of generality, or Why didn’t they say they were sorry when it turned out they’d messed up?
Andrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University

See also

Paper by Mohsen Javdani and Ha-Joon Chang
Marginal Revolution
Ideological bias and argument from authority among economists
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

Ramanan — Hangovers And Economic Ideology

Ramanan brings us up to speed on the latest controversy over policy, economic reasoning, and political ideology.

The Case for Concerted Action
Hangovers And Economic Ideology
V. Ramanan

Kenneth Rogoff — A New Deal for Debt Overhangs?

Rogoff outlines three alternatives for addressing the EZ crisis, or crises, and suggests one.

Project Syndicate
A New Deal for Debt Overhangs?
Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003

Brian Romanchuk — The Debt Supercycle Versus Secular Stagnation

Kenneth Rogoff has been advancing theories that the current environment of disappointing growth rates is the result of a "debt supercycle", not "secular stagnation". He recently summarised his arguments within the article "Debt supercycle, not secular stagnation". Although would agree that some version of a "debt supercycle" theory is correct, I am unconvinced about Rogoff's description of the mechanisms. Meanwhile, I doubt that he will succeed in winning the argument - he is pushing against the unmoveable object that is the circular logic of the natural rate of interest.

Catching up with Minsky but still can't shake neoclassical assumptions.

Excellent simple summary.

Bond Economics
The Debt Supercycle Versus Secular Stagnation
Brian Romanchuk

Robert Skidelsky — Debating the Confidence Fairy

Contra Alberto Alesina.

Project Syndicate
Debating the Confidence Fairy
Robert Skidelsky | Professor Emeritus of Political Economy at Warwick University, a fellow of the British Academy in history and economics, and active member of the British House of Lords

Kenneth Rogoff — The Exaggerated Death of Inflation

High inflation is treated as a theoretical curiosity by many analysts - they are unwise to do so, writes Kenneth Rogoff

At least he now gets the difference between currency issuers and currency users.

More fundamentally, where, exactly, does one draw the line between advanced economies and emerging markets? The eurozone, for example, is a blur. Imagine that there was no euro and that the southern countries had retained their own currencies – Italy with the lira, Spain with the peseta, Greece with the drachma, and so on. Would these countries today have an inflation profile more like the US and Germany or more like Brazil and Turkey?

Most likely, they would be somewhere in between. The European periphery would have benefited from the same institutional advances in central banking as everyone else; but there is no particular reason to suppose that its political structures would have evolved in a radically different way. The public in the southern countries embraced the euro precisely because the northern countries' commitment to price stability gave them a currency with enormous anti-inflation credibility.

As it turned out, the euro was not quite the free lunch that it seemed to be. The gain in inflation credibility was offset by weak debt credibility. If the European periphery countries had their own currencies, it is likely that debt problems would morph right back into elevated inflation.…

Recognising that inflation is only dormant renders foolish the oft-stated claim that any country with a flexible exchange rate has nothing to fear from high debt, as long as debt is issued in its own currency. Imagine again that Italy had its own currency instead of the euro. Certainly, the country would have much less to fear from an overnight run on debt. Nevertheless, given the huge governance problems that Italy still faces, there is every chance that its inflation rate would look more like Brazil's or Turkey's, with any debt problems spilling over faster price growth.

Modern central banking has worked wonders to bring down inflation. Ultimately, however, a central bank's anti-inflation policies can work only within the context of a macroeconomic and political framework that is consistent with price stability. Inflation may be dormant, but it is certainly not dead.

At least we are now playing in the same ballpark. And he admits that the issue is chiefly political rather than economic. That's progress, I'd say.

The Guardian

The Exaggerated Death of Inflation
Kenneth Rogoff | Professor of Economics and Public Policy at Harvard University and former IMF chief economist

Francesco Saraceno — Living in Terror of Dead Economists

Contra the latest from Ken Rogoff, in which he feels compelled to bash "Keynesianism." Of course, the other dead economist that provokes terror is Karl Marx. There is actually a connection between Keynes and Marx in neoliberals minds, which are dominated by the ideal of "the market state," which in today's world is tantamount to the corporate state. "Keynesianism" is a cognate of "socialism" for them, and they are doing their best to esstablish that identity in everyone else's mind too.

The question remains of why we keep observing eminent economists that bash Keynesian policies even when this is inconsistent with (or irrelevant to) their general argument . Barring bad faith, I can’t find any other explanation than an ancestral aversion to Keynes and to its policy prescriptions (a couple of years ago Paul Krugman coined the term of Keynesophobia): whatever argument you are making , just find a way to slip into it a couple of paragraphs claiming that Keynesian policies would not work.

Sparse Thoughts of a Gloomy European Economist
Living in Terror of Dead Economists
Francesco Saraceno
(h/t Mark Thoma at Economist's View)

Watch me take apart Reinhart and Rogoff, deceitful, lying, manipulative, self-serving scum

Fed "prints" $29 trillion. Dollar goes up!!

Peter Schiff, where are you?

Jimmy Rogers, are you awake?

Marc Faber, hello??

Laurence Kotlikoff, Ken Rogoff, Standard & Poor's, where have you all gone???

Ron Paul????

Rick Santelli?????

So we now find out, thanks to researchers at the UMKC, that the Fed "printed" over $29 trillion in the past three years (see prior post) and the dollar went...up???

Don't believe me? Have a look see:

So where have all these dollar bears gone? Why isn't anybody calling them out??

Their bogus dogma about "money printing" and "currency debasement" is about as flat as all the flat world theorist claims 500 years ago.

Time to wake up and relegate these clowns to the dustbin of failed economic theories. Time for everyone to get on board with MMT.

Oh yeah, I forgot to mention...Treasuries surged over that course of time!

The Kiss of Death

Asked whether modern capitalism is sustainable, Ken Rogoff says yes.

Read it at Project Syndicate (short)
Is Modern Capitalism Sustainable?
by Kenneth Rogoff

Conclusion:

In principle, none of capitalism’s problems is insurmountable, and economists have offered a variety of market-based solutions. A high global price for carbon would induce firms and individuals to internalize the cost of their polluting activities. Tax systems can be designed to provide a greater measure of redistribution of income without necessarily involving crippling distortions, by minimizing non-transparent tax expenditures and keeping marginal rates low.  Effective pricing of health care, including the pricing of waiting times, could encourage a better balance between equality and efficiency. Financial systems could be better regulated, with stricter attention to excessive accumulations of debt.

Will capitalism be a victim of its own success in producing massive wealth? For now, as fashionable as the topic of capitalism’s demise might be, the possibility seems remote. Nevertheless, as pollution, financial instability, health problems, and inequality continue to grow, and as political systems remain paralyzed, capitalism’s future might not seem so secure in a few decades as it seems now.

Nothing mentioned about energy and climate change?