Sunday, April 28, 2013

Does George Osborne know?

Readers of this Blog have perhaps become aware of the critiques I and others offer regarding mainstream economics.  The latest imposition that economics has made on our lives is not based in theory (so it seems) but appears to have been due to a failure of spreadsheet management and arithmetic. 'Eminent' Harvard economists whose work has been used by many for the wave of austerity programmes around the world have been shown to have made a mistake with serious implications:

"in their Excel spreadsheet, Reinhart and Rogoff had not selected the entire row when averaging growth figures: they omitted data from Australia, Austria, Belgium, Canada and Denmark. In other words, they had accidentally only included 15 of the 20 countries under analysis in their key calculation.

When that error was corrected, the “0.1% decline” data became a 2.2% average increase in economic growth."

I wonder if this was an example of practice to support a pre-held theory?