Any Keynesians who are rejoicing in the debunking of Ken Rogoff's and Carmen Reinhart's claim that high government debt reduces GDP growth should stop. I suspect Reinhart and Rogoff are, in fact, guilty of a Keynesian error.
To recap, they claimed (pdf) that ratios of government debt to GDP over more than 90% are associated with significantly lower average GDP growth. However, when Thomas Herndon, Michael Ash and Robert Pollin tried to replicate this result, they found that it was due largely to excluding Australian, Canadian and New Zealand experience in the late 40s, and an Excel error - which Reinhart and Rogoff admit was a "significant lapse" - which led to good Belgian growth being excluded.Fixing these errors shows that high government debt has been compatible with decent growth.
So, why do I say Reinhart and Rogoff are Keynesians? Simple. The issue here is not really one of policy; insofar as Reinhart and Rogoff's result has been used by policy-makers, it is in the way that drunks use lamp-posts - as support rather than illumination.
Instead, the issue is about the culture of economics. And here, Keynes (among others) had an unfortunate if perhaps inadvertent effect.
What leaps out of his General Theory is that it is entirely unencumbered by empirical evidence. Keynes thus helped to promote an ideal of the economist as a brilliant man capable of solving problems from his armchair by dint of superb intellect*. What got undervalued in this was the importance of the mundane grunt work of careful fact-gathering.
Reinhart and Rogoff's errors, I suspect, reflect a culture which prizes brilliance - and no-one doubts that Rogoff is brilliant - over dull pedantry.
When I started work, I realized that the job of the practical economist was not so much about theorizing but more concerned with gathering and understanding data - something which academe had wholly unprepared me for. For me, the difference between the professional economist and the amateur is that the former knows the numbers not in the sense of understanding high econometric theory, but in the sense of knowing where they are, what they mean and what they don't. This is no small skill. An ability to navigate the ONS website without recourse to language you wouldn't use in front of your mother requires a mastery of the arcane which is not given to many mortals.
I suspect things have changed a little since I was a student; a lot of good recent work in economics has involved using big data or generating facts by experiment - for example in the work of Mark Grinblatt, Mattias Sutter or Esther Duflo to name but three of many. But I'm not sure it's changing enough. Diane Coyle has reported that many employers want economics students to have "a better practical grasp of quantitative methods including collecting and understanding data (as opposed to more sophisticated econometric techniques)." Perhaps, then, the tendency to elevate the brilliant theorist over the empiricist lingers.
Traditionally, many economists have tried to model themselves on Isaac Newton - albeit emulating his autistic misanthropy better than his genius. But perhaps Darwin would be a better model. His greatness lay not so much in the theory of evolution - something quite trivial he took from economics - but in the years of careful fact-gathering that preceded it. Perhaps if this were so, the sort of mistake made by Reinhart and Rogoff wouldn't have happened.
* There's a contrast here between Keynes and Kalecki; the latter did develop hypotheses which he tested against data, which is is why I hold him in higher esteem than Keynes.