On hammers and nails

I just saw this article by Mike Konczal about the politically-influential 2010 result that economies with over 90% debt-to-GDP ratios perform very poorly. The article discusses one dubious point of methodology and two outright methodological errors, and discusses how a re-analysis of the same data with more solid methodology finds that debt-to-GDP ratio doesn't really seem to affect economic performance. I'm not going to talk about the substance of the papers; as I said in the first post, I don't want this blog to be political, and I'm not an economist anyway. I do want to talk about a potential source of their errors, however.

Continue reading