More seriously, some bloggers and even some economists have compared the Giles “discoveries” to the recent Rogoff and Reinhart brouhaha. In this case, a University of Massachusetts graduate student, trying to replicate empirical results as a class assignment, found several errors in the Excel spreadsheet that Rogoff and Reinhart used to claim that when debt-to-GDP figures exceed 90%, economic growth slowed. Once these errors were corrected, the 90% tipping point disappeared. Since there was no tipping point, governments could stimulate the economy, fight unemployment and increase debt levels without worrying about a slowdown in economic growth.
There was another scandal involving Martin Feldstein back in the 1970s. Feldstein published a paper in the Quarterly Journal of Economics (regarded as one of the top half dozen economics journals) in 1974 showing that Social Security reduced the US personal savings rate. Feldstein then used his results to push for privatizing Social Security in order to increase savings in the US. When two research economists at the Social Security Administration obtained Feldstein’s data to do additional analysis, the first thing they tried to do was replicate the study. What they found was a programming error; when corrected this changed the conclusion of Feldstein’s paper—Social Security tended to increase the individual savings rate.
Such mistakes are rarely intentional. Rather, the problem is a human tendency to believe the things that confirm your expectations and the human tendency to make mistakes. When results turn out as expected, economists do not look for errors in their numbers or their calculations. On the other hand, when results turn out contrary to one’s intuitions, the first thing that economists do is seek out the errors in their math and their data. So there is always a bias in empirical work; you tend to confirm your intuitions.
Vir: Steve Pressman