Alesina, Ardagna, Austerity, Australia

A while ago I published a blog post, and later a Fin article, pointing out that the influential Alesina and Ardagna article, Tales of Fiscal Adjustment, that coined the term “expansionary austerity” was riddled with factual and analytical errors in its discussion of Australia. That piece has elicited a string of lengthy replies from the Catallaxy/CIS team, notable for the absence of any substantive content. Sinclair Davidson produced a mammoth post with multiple updates, entirely devoted to refuting a parenthetical snark on my part that the paper wasn’t peer reviewed. Now there’s another one from Steve Kates, who wants to quibble about the chronological relationship between Jean-Baptiste Say and the Mills, father and son.

So, an open challenge. In my original post, I give seven quotes from the Alesina and Ardagna article, all of which I say are wrong or at least misleading. Does anyone want to defend any of these? Special bonus points for anyone who can defend the opening sentence of their Australian section, which reads “In 1985, a single-party left-wing government took office and launched a stabilization plan to correct the internal and external imbalances (the current account deficit was 4.13% of GDP and the total deficit/GDP ratio was above 3% in 1984). ” (emphasis added).

UpdateKates has added a lengthy update to his post, without, AFAICT, defending the erroneous claims in A & A

13 thoughts on “Alesina, Ardagna, Austerity, Australia

  1. A little off topic, but it is notable that both the Secretary of the Treasury and the Deputy Governor of the RBA have said very recently that the austerity in Europe is making things worse there; indeed is even making the budget positions worse.

    Obviously they need to brush up on their Alesina and Ardagna.

  2. Maybe they conflate the events of 1985, a single-party left-wing government took office with the august party room election of the neo-conservative John Winston Howard on his way to heading a government of big new taxes and excessive middle class welfare. No wonder the warriors of the right are a little confused.

  3. Expecting the Catallaxy crowd to deal constructively in a debate around facts, rather than their usual technique of tag-team verbal abuse is, shall we say, optimistic.

  4. Talking of verbal abuse, I suppose that readers of this website will have seen the following recent masterpiece by the Institute of Public Affairs’ Chris Berg, who now, it would seem, has the Les-Pattersonesque title of “Research Fellow”?

    http://www.theage.com.au/opinion/society-and-culture/were-bombarded-with-swearing-but-who–cares-20120317-1vc9u.html

    When I was an employee (back in the long ago) at this same institute, we routinely published serious authors whose cognitive powers – whether one agreed with the authors or not – it was possible to respect. These authors included B. A. Santamaria, Laurie Short, C. D. Kemp, Nick Greiner, Bob Carr, and America’s Russell Kirk. I cannot imagine that back then, in that intellectual environment, any possible use could have been found for young Master Berg except as lavatory-cleaner or perhaps as temporary umbrella-stand.

  5. Alex – one reason to try and engage with them is that Kates, and Catallaxy peer (and IPA-star) Sinclair Davidson, are lecturers at RMIT… Zombie ideas might spread easily to their work.

  6. There can be only two sensible reasons to engage with those types:

    1. for entertainment and to humiliate them; or

    2. to convince they audience and save them from being seduced by their easy and repetitive rhetoric, and ‘truthiness’.

    Hope of convincing them of the error of their ways is misplaced. Some of them probably know they are talking nonsense, but it is highly remunerative nonsense – one reason they are unlikely to stop. Hell. If they stopped, what would most of them be good for? And who would employ them?

  7. Freelander writes: “Hell. If they stopped, what would most of them be good for? And who would employ them?”

    A meritorious point, Freelander. The very thought of hiring Mr Soon, to name but one egregious example, appeals to me about as much as would life in a North Korean torture chamber.

  8. I like the idea of them being given the Absolutely Free Choice about whether to starve or go to work in a dark Satanic mill, so that they can enjoy the benefits of truly free trade from the other side of the table.

  9. OK, folks, that’s enough – I know Catallaxy comments threads are full of this kind of stuff, but I don’t want personal attacks here.

  10. No worries, JQ; to be clear, I don’t actually want them to starve. I just don’t think they grasp the reality of life for many, many millions: “born on third base and think they hit a triple”, as someone memorably put it.

  11. Fair enough, Professor Quiggin, it’s your website, not mine. My apologies if my own remarks were unduly ad hominem.

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