Angry bear needs to be sedated

Now that one of Robert Waldmann’s reckless charges has been shot down, he makes an even more absurd charge:

Are you saying that Sumner cut and pasted a graph made by someone else without citing the person who actually made the graph ?  That seems to me to be rather serious misconduct.

The title of O’Brien’s piece was “The Most Important Economic Stories of 2013—in 44 Graphs”  So stories of 2013 not Graphs published in 2013. – See more at: http://angrybearblog.com/2014/01/mike-konczal-vs-market-monetarists.html#comment-366903

Two more swings, and two more misses.  Normally I don’t quote private emails, but in this case I can’t imagine Matt O’Brien objecting.  Here’s the request he sent me:

We’re putting together our favorite charts from our favorite people, and were hoping you could send one in. Basically, whatever you think was the most interesting or important or insightful chart of the last year, and a few sentences explaining why.

If you have the time, we’re trying to get these together by Monday night. Thanks!

So they requested my favorite graph from last year, not my favorite chart with data from last year.  But in any case, the chart I sent does show results that hold up pretty well in 2013, as the US continued to outperform the eurozone by a wide margin.

Oh, and about my failure to cite the person who made the graph, here’s the email I sent Matt in reply:

This David Beckworth post has a nice graph.  The US and the Eurozone did roughly equal amounts of austerity.  But the US had some unconventional monetary stimulus whereas the eurozone raised rates several times in 2011 to slow inflation.  David has a graph that shows the results of this natural experiment:

http://macromarketmusings.blogspot.com/2013/06/what-great-natural-experiment-reveals.html

So in a short email I only mentioned David’s name twice.  Yup, I guess that shows I was trying to take credit for David’s work.

To say that 2014 has not been a good year for liberal bloggers would be like saying 2013 wasn’t a good year for the Syrian people.  What a train wreck over there.

PS.  I have a new post on inequality over at Econlog.

HT:  Mark Sadowski


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26 Responses to “Angry bear needs to be sedated”

  1. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    20. January 2014 at 13:30

    Angry Bear has always been all left-wing politics, all of the time. It’s de rigeur there.

    Anyway, Russ Roberts mentions some of Scott’s posts at about 55 minutes into this week’s EconTalk;

    http://www.econtalk.org/archives/2014/01/jonathan_haidt.html

  2. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    20. January 2014 at 13:34

    Some time back we were discussing the Australian minimum wage. I just came across this comprehensive paper from early in 2013 by Rob Bray;

    http://cbe.anu.edu.au/media/2801814/minimum_wage_j_rob_bray_8_may_2013.pdf

    Lengthy, but worth the read.

  3. Gravatar of Mark A. Sadowski Mark A. Sadowski
    20. January 2014 at 14:13

    Scott,
    Off Topic.

    Menzie Chinn (who I genuinely have a great deal of respect for) has a couple of graphs which drive me to distraction.

    http://www.econbrowser.com/archives/2014/01/friday_fiscal_l.html

    Menzie Chinn:

    “[Graph]

    Growth resumed in 2009Q3, as the ARRA kicked in. Given the deep dive that started in 2008Q4, it’s either evidence consistent with fiscal policy efficacy, or one heckuva coincidence…”

    There were some developments taking place in monetary policy during this time as well. The purchase of $500 billion in MBS and $100 billion in other Agencies was announced in late November 2008 (QE1). And in March 2009 this was expanded by another $750 billion in MBS and $300 billion in Treasuries. QE1 was concluded in March 2010.

    Menzie Chinn:
    “…Reader Rob asks to see how the UK compared to the US, in terms of post-crisis stimulus. Here is a cross sectional graph of cumulative growth against change in cyclically adjusted budget balance.

    [Graph]…”

    1) Out of the 33 advanced nations included in the scatterplot, 17 are Euro Area nations or nations pegged to the euro (i.e. Denmark). If you separate them into two groups accordingly and remove Hong Kong as it is pegged to the dollar (leaving 15 non-euro nations), what you will notice is the apparent correlation is confined to the set of euro nations. This can be verified by regressing growth on the change in cyclically adjusted balance. The R-squared value of the euro nations and the non-euro nations is 0.661 and 0.093 respectively, the euro result is significant at the 1% level, and the non-euro other is not statistically significant. The point is of course that the non-euro nations each have their own independent monetary policy which may be able to offset fiscal policy.

    2) As I’ve mentioned in another post, the UK has been subject to a large decline in labor productivity effectively meaning it has suffered a negative aggregate supply shock. Consequently it might be better if nominal GDP were used instead of real GDP, as that is a more direct measure of aggregate demand. (A shift in aggregate supply can also change real GDP.) Replacing real GDP growth with nominal GDP growth raises the R-squared of the euro group to 0.720 and reduces the R-squared of the non-euro group to 0.015.

    3) The cyclically adjusted balance understate the amount of fiscal consolidation taking place in most of the Euro Area periphery. A better measure is the cyclically adjusted primary balance which can be found in the IMF Fiscal Monitor. Using this in place of the cyclically adjusted balance reduces the R-squared of the euro group to 0.602 and raises the R-squared of the non-euro group to 0.017. (It also reduces the number of nations to 14 for each set.) Interestingly, the slope of the non-euro group is now positive although it is obviously still not statistically significant.

    4) In my opinion the end dates should be changed. Most of the Euro Area periphery and the UK began fiscal consolidation in earnest in 2010. Furthermore, the US just underwent its heaviest year of fiscal consolidation. Thus I would choose 2009 and 2013 as the end dates. Doing this results in an R-squared value of 0.827 for the euro group and 0.000 for the non-euro group.

    5) One can go further with the non-euro group by focusing on those nations at or near the zero lower bound in interest rates. But this would only leave five nations (the Czech Republic, Japan, Switzerland, the US and the UK). Adding the Euro Area as a whole expands this to six currency areas. The R-squared value is 0.219 but the result is statistically insignificant. Interestingly the slope is positive and this is driven primarily by the US and the UK.

  4. Gravatar of Mark A. Sadowski Mark A. Sadowski
    20. January 2014 at 15:25

    Corrections:

    Part 2) euro group R-squared = 0.746

    Part 3) euro group R-squared = 0.586

    Part 5) R-squared = 0.318

  5. Gravatar of TravisV TravisV
    20. January 2014 at 15:31

    Ha!

    “Fear Is Mounting On Wall Street That The Fed Will ‘Fall Behind The Curve’ Like In 1994″

    “There is growing concern on Wall Street that there may be less slack in the job market than the Federal Reserve perceives, leading to a scenario where the central bank finds itself “behind the curve” with regard to winding down unprecedented levels of extraordinary monetary stimulus as inflation returns.”

    Read more: http://www.businessinsider.com/is-the-fed-falling-behind-the-curve-2014-1#ixzz2qz73qUAG

  6. Gravatar of Dustin Dustin
    20. January 2014 at 16:15

    Travis, plain case for expectations targeting. In any event, Dave Andolfatto has a post illustrating inflation expectations are on the rise, though the 2 yr and 5 yr expected remain comfortably below the stated 2% target. Doesn’t appear consistent with such ‘behind-the-curve’ fear, at least not for those putting $ behind their words.

  7. Gravatar of Geoff Geoff
    20. January 2014 at 16:44

    “Now that one of Robert Waldmann’s reckless charges has been shot down, he makes an even more absurd charge”

    Did anyone else notice that Sadowski’s “defense” is ad hominem tu quoque? In other words, “It’s not wrong if others do it too”.

  8. Gravatar of Scott Freeland Scott Freeland
    20. January 2014 at 16:45

    Scott,

    It hasn’t be a good year for most liberal or conservative bloggers, but it was a very good year for you and other market monetarists, and that’s what’s important.

  9. Gravatar of Scott Sumner Scott Sumner
    20. January 2014 at 16:56

    Thanks Patrick.

    Mark, Good comments.

    Travis, 1994 was a good year—we should all pray the Fed does as well this year as in 1994.

    Scott, Well the year is only 3 weeks old so far.

  10. Gravatar of Scott Freeland Scott Freeland
    20. January 2014 at 17:38

    Scott, I was actually referring to 2013.

  11. Gravatar of David Beckworth David Beckworth
    20. January 2014 at 18:40

    Scott is correct, Robert Waldman is making much ado about nothing. I too participated in the Atlantic chart of the year exercise and can attest that all we were asked to submit was any graph that we thought fit the billing. I too used someone else’s figure and suspect most contributors did too.

  12. Gravatar of ssumner ssumner
    20. January 2014 at 18:48

    Scott, Oh, I meant 2014.

    Thanks David.

  13. Gravatar of Saturos Saturos
    20. January 2014 at 19:44

    That’s a brilliant post over at Econlog Scott, it should go in your links to key blog posts.

  14. Gravatar of Kevin A Kevin A
    21. January 2014 at 00:03

    The best part was this:

    Robert Waldmann:

    note: This comment has been edited to tone it down and make it more nearly diplomatic.
    I am very willing to tell you in an e-mail what I really think of you. However, I think a frank and honest statement here would damage the comity necessary for useful comment sections.

    What a classy guy.

  15. Gravatar of marmico marmico
    21. January 2014 at 02:23

    Are market monetarists crowing too early?

    Final sales of domestic product rose $361 billion in the first three quarters of 2013. Likewise, $548 billion in 2012. That suggests that monetary policy didn’t fully offset fiscal policy.

    Change in private inventories can have an outsized effect in the short run.

    FRED bar chart

  16. Gravatar of Mark A. Sadowski Mark A. Sadowski
    21. January 2014 at 03:44

    Geoff,
    “Did anyone else notice that Sadowski’s “defense” is ad hominem tu quoque? In other words, “It’s not wrong if others do it too”.”

    No, the point is there’s nothing to defend because there was no crime committed. Looking for detailed citations in a year’s end graphical retrospective is like looking for murder clues in a childrens’ bedtime story. Evidently you’re even more tone deaf than Robert Waldmann.

    P.S. I’m still trying to wrap my mind around the fact that Waldmann was initially convinced that all the graphs were the creation of the submitters, and hence contained up to the minute observations. Doesn’t he read?

  17. Gravatar of ssumner ssumner
    21. January 2014 at 05:41

    marmico, Why would you want to exclude inventories, they are a part of GDP.

    Mark, He seems like a “shoot first and ask questions later” type of person. He throws all these charges at me without knowing any of the facts of the case.

  18. Gravatar of ssumner ssumner
    21. January 2014 at 05:42

    Thanks Saturos.

    marmico, Why would you want to exclude inventories, they are a part of GDP.

    Mark, He seems like a “shoot first and ask questions later” type of person. He throws all these charges at me without knowing any of the facts of the case.

  19. Gravatar of Benny Lava Benny Lava
    21. January 2014 at 05:42

    I stopped reading angry bear years ago. Good to see I didn’t miss much.

  20. Gravatar of marmico marmico
    21. January 2014 at 06:43

    marmico, Why would you want to exclude inventories, they are a part of GDP.

    Short run noise to signal as it is a volatile quarterly series. The market monetarists are hanging their hat on changes in inventory.

    Final sales (AD) for the first three quarters of 2013 are ~$180 billion (~1.2% of NGDP) below 2012. You need to explain that.

    Change in inventory is an accounting fiction which records the mismatch between production and sales. Inventory change through the first three quarters of 2013 has contributed ~30% to NGDP. That’s way out of whack! It should contribute about 10% as the inventory stock is ~10% of NGDP flows.

  21. Gravatar of Mark A. Sadowski Mark A. Sadowski
    21. January 2014 at 06:59

    Scott,
    Off Topic.

    Menzie Chinn responded to my comment with a post:

    http://www.econbrowser.com/archives/2014/01/euro_and_noneur.html

    He changed the end dates and divided them into two groups but he still is using RGDP instead of NGDP and CAB instead of CAPB. Also he kept Denmark with the non-euro group, retained Hong Kong although it is pegged to the dollar, and he dropped Singapore as a RGDP growth outlier. Nevertheless the p-value for the non-euro group is only 17% meaning the results are not statistically significant.

  22. Gravatar of Mark A. Sadowski Mark A. Sadowski
    22. January 2014 at 06:54

    Scott,
    Off Topic.

    It turns out Menzie Chinn was not familiar with the CAPB estimates in the IMF Fiscal Monitor. My initial reply to his repy-post has caused him to cross out a paragraph and estimate additional regressions. (I love it when I cause bloggers to do that.)

    I have a subsequent comment waiting to be released. Essentially it’s all boiling down to whether NGDP or RGDP is the more appropriate dependent variable. His latest result for the non-euro group is statistically significant mainly because the UK and Iceland have both been subject to a large reduction in labor productivity growth (i.e. a negative AS shock). Thus NGDP is obviously the better measure.

    I’m not sure I’ve changed his mind but at least he’s being challenged in a thoughtful way for a change (instead of by his usual Austrian trolls). Also I’m wondering if any economists are paying attention to our debate.

  23. Gravatar of ssumner ssumner
    22. January 2014 at 17:53

    Mark, Thanks for doing that and keep me posted on what you find. It’s a busy time for me with school starting up, but I am very interested in your progress in affecting other bloggers.

  24. Gravatar of Geoff Geoff
    22. January 2014 at 19:43

    Mark:

    “No, the point is there’s nothing to defend because there was no crime committed. Looking for detailed citations in a year’s end graphical retrospective is like looking for murder clues in a childrens’ bedtime story. Evidently you’re even more tone deaf than Robert Waldmann.”

    Who said anything about a “crime”? It was at the very least, contrary to conventional academic ethics.

    No detailed citation is necessary. Just a basic one would be fine.

    Tone deaf? I’ll have you know I once sang Auld Lang Syne only two keys off once.

  25. Gravatar of Mark A. Sadowski Mark A. Sadowski
    23. January 2014 at 09:13

    Geoff,
    “It was at the very least, contrary to conventional academic ethics.”

    Since when is the Atlantic an academic publication?!?

    “No detailed citation is necessary. Just a basic one would be fine.”

    If you had bothered to read this post you’d realize that Scott mentioned the source of his graph not once but twice in his email to Matt O’Brien.

    There’s no way of knowing how many of the dozen graphs that were posted without citation had their source cited by the submitters, but evidently the Atlantic didn’t consider that to be important.

    And the reason why it wasn’t important is because anyone who keeps up with events (obviously not Robert Waldmann) probably already knew where the graphs came from anyway.

  26. Gravatar of Geoff Geoff
    27. January 2014 at 18:15

    I wasn’t saying The Atlantic was an academic publication, I was referring to the behavior of academics.

    I violate it myself, and if someone calls me out, I don’t throw hissyfits.

    “If you had bothered to read this post you’d realize that Scott mentioned the source of his graph not once but twice in his email to Matt O’Brien.”

    I know that. I thought we were talking about something else. Sorry.

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