Austerity Excel error - was it on purpose?
The most influential "research" that Austerity proponents most commonly quote (Reinhart-Rogoff) has recently been found to contain a rookie Excel error. Under further scrutiny, more of the data has been found to have been cherry-picked.
But what about the spreadsheet itself? From what I've read (which may be incorrect, granted) Reinhart-Rogoff did not allow expert economists to see the spreadsheet upon which their report was based. This makes me suspicious. However, they did let a "rookie" economist access to the original spreadsheet. This rookie found the rookie spreadsheet error - when Reinhart-Rogoff did their averages, they left out 5 rows in their equation - which changed the entire results, and essentially destroyed their conclusions.
If I were Reinhart-Rogoff, I would have double- and triple-checked my work before I published. Granted, I would have focused on more "intellectual" aspects rather than simple Excel equations - but I would have checked those as well. The thing about Excel is that it is so user-friendly that all you have to do is click on the formula cell and it will OUTLINE the cells involved, in color-coded outlines!
So, it's not really a matter of reading the formula, but simply clicking on the formula cell and then looking at the spreadsheet and VOILA! the error would be frickin' OBVIOUS!
Further, this begs the question "why were the game-changing examples congregated at the bottom of the rows, so that they could so easily be excluded"?
so WHY was a "rookie" given access to find such a rookie mistake? Especially when it was denied to those considered more "expert" in the field? Perhaps they thought he would be over-whelmed by the data? Perhaps they thought he could be easily discredited - although such an obvious rookie error could hardly be discredited.
Perhaps they wanted to be caught. After all, they had whatever funding they wanted - although surely they knew that after the mistake was found their reputations would be ruined and the funding would dry up.
But does it really matter? The fact is that Austerity has been discredited - both in Models and in Reality.
= new reply since forum marked as read
You don't need a spreadsheet to prove austerity doesn't work; all you need do is look at history. There is not one case in history where applying austerity measures didn't reduce the economy. If you are looking at too energetic of an economy, short periods of austerity can throttle it back to rational levels. Applying austerity to a contracted economy makes it worse.
Now, austerity has a purpose for the rich. If you are a developer who wants to build homes in a national park, you might want to get the congressman you own to throw on some austerity. When austerity then ruins the economy, suggest the government could make money by selling federal land.(This is happening in the West.)
Real life case study: Greece. Its problems have three origins. First is near-universal corruption. Second is near-universal tax evasion.(When people refer to tax evasion as the national sport you know you're screwed.) And the last is austerity. Corruption and evasion got them to the point where they tried austerity...and when it didn't work they tried it again... The ultimate cure for Greece's woes would be to get rid of austerity, deport every politician in the country to an island (think "Escape From New York"
and replace them with Harvard poli sci students, and ship over every Greek-speaking IRS auditor we have. But they won't do that.
Thanks for bringing it over. 
who likely didn't feel empowered to double check the work of the high and mighty - they just typed up what they were told to type up.
I am loving that Dr Krugman is having such a field day with this. 
on whose "job" it was to peer review this disaster.
Vindication.
