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“He was even talking about it out there when we were kind of having a moment; he said that when he came in, there were already lots of ‘men’ in the bullpen and he felt like a little kid. I told him, ‘You never said a word, you just sat there. But you were always watching everybody.’ He said, ‘Yeah, I was taking in everything I could.’ http://beeg-beegcom.in.net/ beeg Second, all participants in policy debates should retain a healthy skepticism about retrospective statistical analysis. Trillions of dollars have been lost and millions have been unemployed because the lesson was learned from 60 years of experience between 1945 and 2005 that “American house prices in aggregate always go up.” This was no data problem or misanalysis. It was a data regularity until it wasn’t. The extrapolation from past experience to future outlook is always deeply problematic and needs to be done with great care. In retrospect, it was folly to believe that with data on about 30 countries it was possible to estimate a threshold beyond which debt became dangerous. Even if such a threshold existed, why should it be the same in countries with and without their own currency, with very different financial systems, cultures, degrees of openness and growth experiences? And there is the chestnut that correlation does not establish causation and any tendency for high debt and low growth to go together reflects the debt accumulation that follows from slow growth. |
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