Tag Archives: business

Reinhart and Rogoff

“OH MY GOD, DARLING, I FORGOT TO MULTIPLY BY TWO!!!”

Economic Counsellor Kenneth Rogoff

Economic Counsellor Kenneth Rogoff (Photo credit: Wikipedia)

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English: carmen reinhart giving a speech in th...

English: carmen reinhart giving a speech in the university of maryland (Photo credit: Wikipedia)

Strange as it seems, the answer is probably “Yes”. The recent budget crisis that nearly threw the U.S. off the fiscal cliff and the austerity measures that have ensured no less that 27 million Europeans are on the dole have been hughly influenced by the work of economists Carmen Reinhart and Kenneth Rogoff. It now appears that there was a coding error in their data thereby causing the “Excel Depression” according to Paul Krugman.

Why do we have economists? -> to give astrologers a good name!

Apologies to Paul Krugman, who seems to be one of the only economist in the world talking sense at the moment.

It is clear that fiscal deficits cannot be extended indefinitely. However, such dogmatism that the world will turn on a pin is not helping recovery, but inducing fear, panic and reducing realtime activity, as people save and save, and banks hoard and hoard. Most of us live in a real world, not just an economy, and we need to get beyond management by spreadsheets that are full of unvalidated assumptions, hidden logic, and biased prejudices, not to mention arithmetic errors!

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