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View Diary: Researchers finally replicated Reinhart-Rogoff, and there are serious problems. (124 comments)

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  •  CPC Budget isn't on the right track (2+ / 0-)
    Recommended by:
    melo, ek hornbeck

    TMC, Even this budget has deficits that are far too small to support full employment, especially from 2015 - 2013. If you really took their budget seriously and tried to implement you'd have another great recession before 2023. Also, you might not even get out of this one because their deficits in projected deficits in 2013 and 2014 are too small to accommodate both our desire for imports and for savings to repair private balance sheets tanked by the crash of 2008.

    See here and here, for more detailed arguments.

    Also, the latest critiques of R-R ignore the most important one of all. The R-R analysis conflates nations sovereign in their own currency with nations that are not and averages growth rates in both types of nations for their analysis.

    However, MMT says that we would expect lower growth rates in nations with higher debt-to-GDP ratios if the bond interest rates paid by those nations are subject to the market.

    Sovereign currency nations have more policy space because their bond market interest rates are controlled by their central banks. In addition, they can even “print” or “mint” currency if they need to maintain growth.

    •  good point (1+ / 0-)
      Recommended by:
      ek hornbeck

      about the sovereign vs. non-sovereign critique.

      BUT the fact that this study has been swiftly debunked WITHOUT running separate regressions (or a dummy variable for monetary sovereign) shows just how much of a failure this R&R data and study was.

      Reinhart's husband is an AEI fellow, by the way.

      AEI is funded by corporate interests.

      There is a funding trail here that could lead those of us more conspiracy-inclined individuals to see a much more nefarious motive by Reinhart and Rogoff...

      There will be time for that later, but most important now is the mainstream promotion of this austerity study being DOGSHIT.

      And I think the data might actually be fully public now -- so we can run some clear analyses of the effects of monetary sovereigns vs. non.

      Deficits don't matter, jobs do.

      by aguadito on Tue Apr 16, 2013 at 10:43:31 PM PDT

      [ Parent ]

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