Rags fly, in the usually plastered world of academics. On the one hand Nobel laureate Paul Krugman, professor at Princeton, on the other Carmen Reinhart and Kennet Rogoff, professors at Harvard, incarnations of two diametrically opposed visions of the economy and of two equally different indications on how to get out of the crisis.
The theme of the clash is the doctrine of the two Harvard professors who have set the 90% the limit of GDP beyond which the public debt would start to have a negative effect on public debt. Theirs is a thesis espoused by many academics and government leaders in Europe and the United States, but entered into crisis a few months ago, when a group of young economists questioned the correctness of Reinhart's and Rogoff's calculations. The two admitted the mistake, but reaffirmed the validity of their thesis.
At that point, however, it was Krugman who entered the dispute with a straight leg, attacking Reinhart and Rogoff in his column in the New York Times and through his blog, and accusing them of constructing their thesis (capable, according to Krugman, of influencing also the policies of the ECB) on incorrect data. What was more striking than the position of the Nobel laureate, who was very active in political life and notoriously opposed to austerity measures, was the very harsh tone of his indictments.
Reinhart and Rogoff only responded to the attack on Sunday, saying they were amazed at the "spectacularly uncivilized" behavior of such a respected economist, and clarifying their thesis. But the personal clash has meanwhile become the almost Manichean clash between two visions of the economic world: on the one hand the positions of the American conservatives of Germany led by Angela Merkel, on the other the vision of the more liberal left.
The stakes are even higher than it seems: at stake is how to deal with an unprecedented crisis (the book by Rogoff and Reinhart is titled "This time it's different"), an ever-present debate, but often dormant, creeping: how do you deal with a crisis like this? With an eye always focused on the deficit and with the primary objective of cutting public debt or by restarting government spending, restoring life to the stagnant waters of economic development and postponing the discussion of the deficit until better times? On the one hand, in a nutshell, austerity and on the other, growth.
It was Krugman himself who put a stone on the clash, throwing some water on the fire, stating that both he, Reinhart and Rogoff have better things to do than slip into the thicket of a potentially infinite clash. But the question remains: how do we get out of this crisis?
