Focus on official statistics makes Covid19 worse, but look better

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(Part I of “Statistics and the Pandemic”)

May 29, 2021 — Mark Twain said, “There are three kinds of lies: lies, damned lies, and statistics.”  Too often, the pandemic has unnecessarily allowed scope for the sort of popular suspicions reflected in Twain’s bon mot.

Statistics are in fact a critical component of the fight against Covid-19.  Their use ranges from judging the efficacy of different vaccines to judging the performance of different governments.

But throughout the pandemic, comparisons across countries have focused too much on the wrong statistics. The problem is worse than impeding voters’ evaluation of governments’ performance.  The focus on the wrong metrics has given some political leaders a strong incentive to under-react to the pandemic, to suppress testing for example, and thus has arguably contributed to the loss of millions of lives. read more

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What Three Economists Taught Us About Currency Arrangements

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April 24, 2021 — A generation of great international economists is passing from the scene.  Richard Cooper died on December 23. An American, he was teaching his classes at Harvard until the very end. Robert Mundell, passed away on April 4.  Originally Canadian, he was a winner of the Nobel Prize in economics.  And John Williamson, on April 11. Originally British, he had been the first scholar hired by the Peterson Institute for International Economics.

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Biden Avoids Mistake of Insufficient Fiscal Stimulus

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March 27, 2021 — It has been a year since the US and the world went into recession.  Because of its origins in the sudden pandemic, it was possible to reliably discern the advent of the recession before it was reflected in any of the standard economic statistics, which is rare.  (I hope it shocks no one to learn that economists can’t normally predict recessions.)

By the end of the second quarter of 2020, US GDP had fallen 11 %. This record plunge took the US economy from a level that is estimated to have been 1.0% above potential output at the end of 2019, to a level 10 % below potential in mid-2020.  Potential output is the level of GDP that is produced when unemployment is at its so-called natural rate, the capital stock is operating at the capacity for which it was designed, buildings have their normal occupancy rates, etc. read more

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