Cristina continues to sell Argentina down the river

[surfing]

This article written by a Nobel prize winner says quite the contrary

http://krugman.blogs.nytimes.com/2012/05/03/down-argentina-way/

Oh please.

http://www.forbes.com/sites/timwors...t-argentinas-economy/?ss=strategies-solutions

 

[expatinowncountry]

I would seriously be interested in having a once-per-week or once-every-other week informal coffee discussion on current events in economics and business in Arg. I would think others on this forum would be interested as well.

I would be happy to attend if I am in Baires (usually spend half the time here and half in Oxford and Paris)

 

[expatinowncountry]

Mike "Mish" Shedlock (another nobody) has a great analysis on Krugman and his references on Argentina. His conclusion on Krugman is spot on.

http://goo.gl/yhDui

Pssst, he is not doing any analysis on the article I shared, neither talking about the current situation in Argentina... he is attacking the person based on analysis Krugman did where he may have not be right. If someone who makes a mistake is a clown, then we are all clowns. He got the nobel prize in economics cause he has very fine contributions to economic science (believe me... very fine contributions in trade theory, analysis of economic crisis, urban economics, and development economics). Now you can take the stance of CFK and say that all economists are wrong and that everything should be in the power of politicians.

A lot of nobodies make a business of critizising well known people. It is their only chance in life to get attention (like he got yours). Sometimes they are right and sometimes they are not. What matter is the discussion of the issues no matter who says it or to what school of economic thought he belongs (if he belongs at all to a school). You are still not address the issue that attacking a person, and not the ideas is the wrong way to go in any debate.

 

[surfing]

Pssst, he is not doing any analysis on the article I shared, neither talking about the current situation in Argentina... he is attacking the person based on analysis Krugman did where he may have not be right. If someone who makes a mistake is a clown, then we are all clowns. He got the nobel prize in economics cause he has very fine contributions to economic science (believe me... very fine contributions in trade theory, analysis of economic crisis, urban economics, and development economics). Now you can take the stance of CFK and say that all economists are wrong and that everything should be in the power of politicians.

A lot of nobodies make a business of critizising well known people. It is their only chance in life to get attention (like he got yours). Sometimes they are right and sometimes they are not. What matter is the discussion of the issues no matter who says it or to what school of economic thought he belongs (if he belongs at all to a school). You are still not address the issue that attacking a person, and not the ideas is the wrong way to go in any debate.

And yet you ignore the article I posted that DOES specifically go after Krugman's flawed analysis . Krugman got lazy and gave up a long time ago. That was the same time he lost all the respect I USED to have for him. I could say the same for the Nobel Prize committee; their record of late isn't so hot either!

 

[camberiu]

Pssst, he is not doing any analysis on the article I shared, neither talking about the current situation in Argentina... he is attacking the person based on analysis Krugman did where he may have not be right.

I am well aware that he is not talking about the current situation. The point here is that Krugman is a known hypocrite and manipulates the facts based on his own political Agenda. He is not being criticized for making mistakes. He is being criticized for changing his instance on economics depending on who is the president. A Republican is president: Krugman comes out attacking deficits and talking about how Argentina is an example of how excess debt can be bad. A Democrat is president: Krugman does a 180 and all of a sudden, federal deficit are just not big enough and Argentina becomes a fine example on why government runaway spending is not so bad.

In regards of the original article, Forbes put it perfectly:

- What is the source of the data presented?
- What inflation rate is being used by Krugman to calculate "real GDP" growth of Argentina? The one presented by CFK? If yes, than everything he wrote on the article is meaningless bullshit.

But like any good high priest, he does not provide any sources or ways to validate his assumptions. He is Paul Krugman after all, supreme high priest of academia. So, we just take his word for it.

 

[expatinowncountry]

Oh please.

http://www.forbes.com/sites/timwors...t-argentinas-economy/?ss=strategies-solutions

I am not ignoring your article... It is Sunday and I am busy with life but here I go...

Oh my oh my oh my... I do not blame you but shame on the Forbes guy cause he should know better. He knows nothing about how national accounts are estimated. The real GDP is estimated independently of the nominal GDP using proxies for real activity (quantity indeces) when you use the production approach or looking to factor remuneration when you use the income approach or with the decomposition of expenditures (in the expenditure approach). So the WB (and PK) are not taking the Nominal GDP and deflating using the CPI (consumer price index). You do not need a PhD to know that but your basic econ undergraduate courses should be enough.

Even more, the price index implicit in the comparison between Real and Nominal GDP is called the GDP deflator what is very very very different from the CPI (please google difference between gdp deflator and cpi).
The government is cheating in the CPI... it could not cheat with the GDP deflator and the divergence between the two shows that the Argentine government is manipulating the CPI.

The CPI measures the price variation in the typical consumption basket of the average household. The government is cheating because they do not tell what is in their typical basket and where those prices were collected. Why they do that? Because (1) some government bonds are indexed with the CPI (2) salaries are negotiated with the CPI (3) inflation is unpopular

So, the guy from Forbes is using wrong arguments to rebate Krugman graphs. Now, this does not mean that PK is right... the graph is misleading because of something I already mention in other post. And even taking into account that, we all know that Argentine GDP growth is driven by external factors, not by CFK so Krugman may be wrong on this.

But again the real GDP growth figures are (almost) independent from the CPI index.

 

[expatinowncountry]

And yet you ignore the article I posted that DOES specifically go after Krugman's flawed analysis . Krugman got lazy and gave up a long time ago. That was the same time he lost all the respect I USED to have for him. I could say the same for the Nobel Prize committee; their record of late isn't so hot either!

BTW, I do agree Krugman got lazy. He has not published anything decent in years. He was also a lazy (but interesting) professor.

Please note the Nobel Prize committee is not the same for Economics than all the other disciplines. Alfred Nobel did not leave money for a Nobel in Economics (probably a waste of money). The Nobel in Economics is awarded by the Riskbank (Swedish Central Bank). Their record is quite good. Krugman was one of the most productive and creative economists. The prize is awarded for life achievements, not their last NY Times columns.

I am not sure what the problem with Camberiu is. He/she does not understand plain English... it does not matter if you have reputation or not, it does not matter to what school you belong, it does not matter if you are a flip flopper... what matter is the discussion of the IDEA. You can criticize the idea for what it is, not for who says it. I even had one or two nice ideas in my life and I am no one.

 

[camberiu]

The government is cheating in the CPI... it could not cheat with the GDP deflator and the divergence between the two shows that the Argentine government is manipulating the CPI.

Really? The government COULD NOT cheat in the GDP deflator??? How???
Do we know who provided the source of the GDP deflator to Krugman? Which known deflator was used for that calculation? Can we verify it?


Also, care to explain the article bellow?
http://www.atfa.org/cgi-data/news/files/4489.shtml

An official that followed the two Fund missions in Buenos Aires on December 8-16 last year, and April 4 to 11 this year, explained that the problem of the GDP was there from the beginning. Why? "Because to measure growth, you must 'deflate' it, which is to say it lacks 'taking nominal growth and taking out what it owes to inflation", explained the official. And he added that for that one uses a "deflator" which is an index that covers more products than the CPI-GBA. According to the source, "the Fund came to the proper conclusion that if the CPI is not reliable, then neither is the deflator." And clarified that "since 2007 they've been very far apart." This means that the GDP as the INDEC currently measures it is not credible either. The source went further.

 

[camberiu]

BTW, I do agree Krugman got lazy. He has not published anything decent in years. He was also a lazy (but interesting) professor.

Apparently he writes decently enough for you to use his recent text on Argentina's GDP growth as a counter argument for the original text talking about the nationalization of YPF and the growing debt in Argentina. You even made sure to mention that he was a "nobel prize winner", as if that would automatically increase the credibility of the article.

I am not sure what the problem with Camberiu is. He/she does not understand plain English... it does not matter if you have reputation or not, it does not matter to what school you belong, it does not matter if you are a flip flopper... what matter is the discussion of the IDEA. You can criticize the idea for what it is, not for who says it. I even had one or two nice ideas in my life and I am no one.

Interesting considering that you made sure to mention that Krugman was a nobel prize winner on your initial post and made sure to call Peter Schiff a "Peter WHO".

 

[expatinowncountry]

Really? The government COULD NOT cheat in the GDP deflator??? How???
Do we know who provided the source of the GDP deflator to Krugman? Which know deflator was used for that calculation? Can we verify it?


Also, care to explain the article bellow?
http://www.atfa.org/cgi-data/news/files/4489.shtml

An official that followed the two Fund missions in Buenos Aires on December 8-16 last year, and April 4 to 11 this year, explained that the problem of the GDP was there from the beginning. Why? "Because to measure growth, you must 'deflate' it, which is to say it lacks 'taking nominal growth and taking out what it owes to inflation", explained the official. And he added that for that one uses a "deflator" which is an index that covers more products than the CPI-GBA. According to the source, "the Fund came to the proper conclusion that if the CPI is not reliable, then neither is the deflator." And clarified that "since 2007 they've been very far apart." This means that the GDP as the INDEC currently measures it is not credible either. The source went further.

Sorry if I was not clear. Governments in general do not estimate the GDP deflator, you get it from the difference between Nominal and Real GDP that are estimated independently of the CPI (google GDP delator estimation). Your quote is telling exactly what I said in my previous post... we know the government is cheating in the estimation of the CPI because since 2007 the difference between the government controled CPI has diverged from the non government controled GDP deflator.

Krugman is not using any deflator. He is not mentioning even his source probably because was a newspaper article but as the Forbes guy guessed correctly, he used the data from the World Bank (World Bank Development Indicators). Krugman is using directly the real GDP.

Now, there is also the possibility (in my opinion, a certainty) that the government is cheating in the estimation of the GDP in a way that the deflator at the end of the day is lower (so to make it look consistent with the CPI). If you estimate wrong real and nominal GDP, the implicit GDP deflator would be wrong. But this is not what the guy from Forbes is saying. He is trying to find a mistake Krugman did not make.

In my previous post I said real GDP is "almost" independent from the CPI becuase it is not totally independent. I do not want to become very technical but in most developing countries, the GDP is estimated with the expenditure method. Since you cannot estimate consumption because it is very hard, you get consumption as a residual. If you underestimate inflation you may overestimate consumption and you may have an effect on GDP growth rates. How much? It is hard to tell without looking to the numbers in detail. My guess is that the Argentine real growth rate since 2007 could be 1% lower than the official figure but do not quote me... this is an educated guess.

If the real growth rate since 2007 has been 1% lower than the estimated by the government, the gap in the GDP index in Krugman's figure between Argentina and Brazil would be smaller but still Argentina's rate would be slightly higher than Brazil. As you know the 2008 crisis hit Brazil worst than Argentina and Brazilian grow rates has been slagish in the last few years because of low investment rates, appreciation of the real, and others.

Now I could show a figure starting in 1998, and then the growth rates would be slightly higher for Brazil.

Again, Argentina enjoyed high growth rates (with or without government cheating) in the last few years despite and not because of the Argentine government policy.