I then wrote
“But didn’t the CBR report say that the benefits of the Single Market had been exaggerated by the Treasury? Yes it did. Here is some of its reasoning. That growth in UK export share after the Single Market is not as impressive as it looks, because there is an underlying 6% positive trend in the share, which you can detect before we joined the EU. That looks pretty on a picture, until you realise it is nonsense. A 6% trend rise in an export share will imply that at some point not too far away UK exports to the EU will be as high as total EU GDP. UK exporters are just not that much better than exporters in other countries. There is no underlying trend rise in the UK’s export share.”
By export share, it’s apparent that I’m speaking about share in vacation spot GDP, as within the chart. In my paragraph there’s an error. I used a 6% determine relatively than the right three.5% determine for his or her development in export penetration relative to the non-EU penetration. It was a very silly error, as a result of slightly below Chart 7 is Chart eight, which accommodates the right determine.
But, because the authors should know, this error is just not essential to my argument. Replace 6 by three.5 within the related paragraph and it nonetheless makes good sense. What I used to be criticising was the notion that there was any substantial underlying development in export penetration, and that the impression of EU membership ought to be judged relative to that development. You can see from this chart how ludicrous a three.5% development is: it implies that with out EU membership the UK exports share can be now above 10% and rising quick. This development appears to be an necessary a part of their judgement that UK export penetration relative to the EU would fall by considerably lower than the Treasury assume of their evaluation. The development is senseless, until the purpose is to make the impression of EU membership look small.
So what’s the authors’ response to my primary criticism of their Prime piece? There is none.
As far a the 6 relatively than three.5 is worried, it’s also odd is that that is the primary time they’ve talked about the error to me. The publish was from mid-January, and I might have fortunately modified 6 to three.5 if that they had pointed it out to me earlier.
How do the authors reply to this second submit within the Prime piece. They write
“It is unusual for Wren-Lewis to rely uncritically on mainstream economists, but he was willing to do so in this case. With many of Wren-Lewis’ articles being used by one of us in economics teaching to encourage students to query and to test what is considered ‘mainstream’ it seems more than a little surprising to be discredited for daring to do so.”
This is flawed in some ways. First, I used to be not counting on others, as I had critical misgivings about their use of tendencies that I define above. Second, I made no point out of ‘mainstream’ and heterodox anyplace, so any suggestion that this was behind what I wrote is their invention. Finally, there isn’t a drawback with anybody difficult anybody else.
Let me reproduce one of many quotes from Ben’s piece
“The HMT [Treasury] use of gravity model was perfectly in line with best practice. It was classic evidence-based policy analysis”, stated Richard Baldwin, Professor of International Economics at The Graduate Institute of Geneva. Professor Baldwin went on to accuse Mr Gudgin himself of partaking in “policy-based evidence making” and “using evidence the way a drunk uses a lamp post – for support, not illumination”.
So Richard Baldwin was accusing the authors of precisely the pretend economics that I talked about. Given my suspicions about their remedy of tendencies mentioned above, I felt justified in writing about their piece on this context.
I might have ignored Richard Baldwin’s criticism and my very own suspicions, and never included them on this submit. But right here is one other quote from Ben’s piece:
 Actually the second submit by date: the 2 publish have been a day aside.
SOURCE: primarily macro – Read complete story here.