Beyond Their Ken?

Beyond Their Ken?

Spain’s economic problems now form part of such a complex web of cause and effect, action and reaction, that it is getting increasingly difficult for laymen, journalists and politicians alike to get to the core of what is actually happening. “To a herd of rams, the ram the herdsman drives each evening into a special … Read more

U.S. Jobless Claims Fell Last Week, Close To A 5-Year Low

U.S. Jobless Claims Fell Last Week, Close To A 5-Year Low

Today’s update on jobless claims should dampen worries a bit over the outlook for the economy. New filings for unemployment dropped a healthy 16,000 last week to a seasonally adjusted 339,000. Once again, claims are moving close to the post-recession low of 330,000 reached back in January—a five year low. One number doesn’t mean much, of course, … Read more

The End of Growth?

The End of Growth?

Driven by massive monetary stimulus from central banks, the performance of financial markets, especially stocks, have decoupled from that of a moribund real economy. Financiers assume that the strong rise in equity markets anticipates a strong economic recovery. However, there are fundamental reasons why the world may be entering a period of low or no … Read more

Reinhart-Rogoff Data Problems

Reinhart-Rogoff Data Problems

The methods and conclusions of an influential paper by Carmen Reinhart and Kenneth Rogoff published in 2010 have recently been challenged by Thomas Herndon, Michael Ash, and Robert Pollin. Here I comment on both the details and broader significance of the dispute. Let me begin by stating what I perceive to be the core policy question: are high … Read more

Expansionary Austerity: Reinhart&Rogoff and the Neolibs

Expansionary Austerity: Reinhart&Rogoff and the Neolibs

I just did another interview on Reinhart&Rogoff and the magic, disappearing, 90% debt ratio, centered on the Neoliberal belief in “expansionary austerity”. You can see the original here: http://acemaxx-analytics-dispinar.blogspot.ch/2013/04/interview-prof-l-randall-wray.html Here is the text of the newest interview: Q: Around two years ago, you pointed to an economic error in R & R paper. You said (*See … Read more

Why Reinhart and Rogoff Results are Crap

Why Reinhart and Rogoff Results are Crap

Kudos to UMass economists for exposing the flaws in R&R’s empirical work. The conclusion that there is some magic debt ratio beyond which growth slows was never substantiated by R&R’s data–they fudged and flubbed the empirical work. True enough. However, the whole “research” method as well as the “theory” behind it was bunk anyway, as … Read more

NO, ROGOFF AND REINHART, THIS TIME IS DIFFERENT! SLOPPY RESEARCH AND NO UNDERSTANDING OF SOVEREIGN CURRENCY

NO, ROGOFF AND REINHART, THIS TIME IS DIFFERENT! SLOPPY RESEARCH AND NO UNDERSTANDING OF SOVEREIGN CURRENCY

Carmen Reinhart and Ken Rogoff came as close to celebrity status as an economist can ever come, with their book, This Time Is Different. They claimed that 800 years (!) of financial history proves that high government debt ratios lead to low economic growth. Governments all over the world took heed and downsized, adopting austerity that … Read more