Obviously a case of Ricardian equivalence. My rational expectations told me so.
On Wed, Apr 24, 2013 at 2:40 PM, Jim Devine <[email protected]> wrote: > *Yet More Fun With Reinhart and > Rogoff*<http://feedproxy.google.com/~r/beat_the_press/~3/KOJ_aodfZ_Q/yet-more-fun-with-reinhart-and-rogoff?utm_source=feedburner&utm_medium=email> > > Posted: 21 Apr 2013 01:10 PM PDT > > In Carmen Reinhart and Ken Rogoff's (R&R) famous and now largely > discredited "Growth in a Time of Debt," New Zealand's -7.6 percent growth > (wrongly transcribed as -7.9 percent) in 1951 played an outsized role in > their conclusion that high debt led to sharply lower growth. This number > carried inordinate weight because R&R had mistakenly left out 4 high debt > years for New Zealand in which it had seen healthy growth. Using their > country-weighted methodology (each country counts the same, regardless of > size or years with high growth) this mistake by itself subtracted 1.5 > percentage points from the growth rate of countries in years of high debt. > > To make the story better, today I received a tweet that informed that the > -7.6 percent growth New Zealand experienced in 1951 was not in any obvious > way attributable to its high debt. In fact, the country suffered from a > labor dispute that led to a *strike/lockout of waterfront > workers*<http://en.wikipedia.org/wiki/1951_New_Zealand_waterfront_dispute>that > lasted 5 months. Perhaps this dispute can be linked to New Zealand's > high debt at the time, but the connection is far from obvious. This is the > sort of problem you get when using very small samples. > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > > -- Cheers, Tom Walker (Sandwichman)
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