Economists Ken Rogoff and Carmen Reinhart take to the op-ed page of the Times to defend themselves from recent criticism of their work, which has become a bulwark of austerity policies around the world and particularly in Europe.
Our research, and even our credentials and integrity, have been furiously attacked in newspapers and on television. Each of us has received hate-filled, even threatening, e-mail messages, some of them blaming us for layoffs of public employees, cutbacks in government services and tax increases. As career academic economists (our only senior public service has been in the research department at the International Monetary Fund) we find these attacks a sad commentary on the politicization of social science research. But our feelings are not what’s important here.
On the merits, Rogoff and Reinhart argue that there is less to their critics than has been suggested.
A sober reassessment of austerity is the responsible course for policy makers, but not for the reasons these authors suggest. Their conclusions are less dramatic than they would have you believe. Our 2010 paper found that, over the long term, growth is about 1 percentage point lower when debt is 90 percent or more of gross domestic product. The University of Massachusetts researchers do not overturn this fundamental finding…
Not surprisingly, Paul Krugman disagrees.
Economic debates rarely end with a T.K.O. But the great policy debate of recent years between Keynesians, who advocate sustaining and, indeed, increasing government spending in a depression, and austerians, who demand immediate spending cuts, comes close — at least in the world of ideas. At this point, the austerian position has imploded; not only have its predictions about the real world failed completely, but the academic research invoked to support that position has turned out to be riddled with errors, omissions and dubious statistics.
That “riddled with errors, omissions and dubious statistics”? That means you, R and R.
Krugman actually goes on to make a pretty interesting argument here: That the reason austerity policies have become so popular is because they reflect the wishes of the one percent, who are overwhelmingly more concerned with budget deficits than everyone else is—and favor cutting Social Security and other “entitlements” in order to cut deficits. And since the 1% tend to be the drivers of economic policy, hence we have austerity measures.
So…will the debunking of Rogoff et al make any difference?
To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies? I hope not; I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified.
I guess we will.