"Don’t Replace Data With Ideology" By Emi Nakamura, Jon Steinsson and Nicolas Vincent

Don’t Replace Data With Ideology

By Emi Nakamura, Jon Steinsson and Nicolas Vincent at Bloomberg

http://www.bloomberg.com/news/2012-06-12/don-t-replace-data-with-ideology.html

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In various parts of the world, politicians are waging war on the economic statistics that help people assess the performance of their leaders. Over the past few years, the Argentine government has reported inflation rates more than a dozen percentage points below private-sector estimates, and has filed criminal charges against statisticians attempting to publish their own data. Late last year, Greece launched a criminal investigation of the head of its statistical agency for reporting larger budget deficits than the government deemed appropriate (or, as he put it, for “not cooking the books”).

If you think such degradation of national statistics couldn’t happen in more developed countries, think again.

In the U.S., a battle is brewing in Congress over two of the most valuable gauges of the nation’s economic health: the American Community Survey and the Economic Census. The data sets, which the U.S. has maintained in some form since the early 1900s, provide researchers and the public with a trove of information on everything from the size of families’ mortgage payments in Boise, Idaho, to the nation’s median annual income.

Crucial Role

The data play a crucial role in calculating the performance of the entire U.S. economy, and in deciding how public funds should be allocated among states. Economists use them to figure out whether government policies are working. Businesses use them to study demographic trends and inform important decisions. The clarity they provide helps make the U.S. particularly attractive for foreign investment.


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