Update: My full fisking here.
I want to focus on one sentence in the R&R letter
“politicians may float a citation to an academic paper if it suits their purposes. But there are limits to how much policy traction they can get with this device when the paper’s authors are out offering very different policy conclusions. “
The claim that there are such limits is not supported with any historical evidence. I think it is plainly false, unless the limits are say thta the politicians can’t travel faster than light by distorting academic work.
The example of R&R and the alleged 90% critical level of debt to GDP is proof that their claim is false. Politicians have gotten huge policy traction citing them and Herndon had a significant impact on the policy debate.
Also note the case of Kenneth Arrow whose first welfare theorem and impossibility theorem have been used for decades to argue that markets are superior to political processes and who is a democratic socialist. His view on that rather important issue has had no impact on the debate, while misuse of his mathematical results has had a huge impact. Phillips made no claim that the scatter he plotted was a structural relationship. He expressed horror over how it was used.
R&R’s claim about history is plainly utterly false and they should know it.
But there is something they can, and really should, do. If politicians are misusing their work, they can denounce those politicians by name. Consider
The 90% debt-to-GPD ratio was sighted by many as proof of the necessity of austerity in fiscal matters. Paul Ryan’s 2012 “Path to Prosperity” budget plan cited the paper and specifically cited the 90% figure. European Union Economic and Monetary Affairs Commissioner Olli Rehn cited the study when urging EU member nations to cut their budgets, saying, “Serious empirical research shows that public debt above 90% of GDP acts as a permanent drag on growth.”
Reinhart and Rogoff could and should have said “Paul Ryan, you know nothing of our work” (obligatory Annie Hall reference). They did not. They still can. I think they should. His claims have no basis in the evidence and all reality based people should say so.