More on the IEA: "Much has been written in the past few months about the Institute of Economic Affairs, the right-wing think tank. But there is one element of its work that could do with more scrutiny: its maths.
The lead author? One Mr S Singham. It is, on the face of it, an imposing piece of statistical analysis. There's just one problem - its conclusions cannot bear any weight.
This is not a question of politics or economics, but maths.
First, this work breaks all the rules of basic data hygiene and model designs. The peculiar way the model is fitted together means it could never produce a reliable or stable output that could be relied upon.
Second, the model's whole weight sits on assumptions that are odd or indefensible.
For example, all else being equal, it assumes making it cheaper to lay people off will lead to a rise in health spending and a rise in domestic banks' supply of credit. That, in turn will lead to a rise in output.
But also: the IEA's maths relies - in a fundamental way - on a misunderstanding of how GDP is calculated and what drives health spending. Somewhat suspicious, I sought to replicate parts of his analysis, using the sources he cites. I will cut to the chase: I could not duplicate his results.
For example:
Mr Singham says this model explains more than 90% of the difference between countries' growth rates. That is extraordinarily high: a model that gets almost everything right. I get a number under 40%.
When Mr Singham runs the model, it gives the (obviously true) finding that education is positively linked to growth. When I run the model, it does not find this.
When Mr Singham runs the model, it links a higher domestic supply of credit to higher growth. My back-engineering of this model shows the opposite.
The issue here is that when I run this model it gives bananas results. When he runs it, it gives clear and elegant results which are all of the right scale. This is curious.
I have asked Mr Singham for his data. I am also quite curious about the indices he produced which do the final piece of linking of deregulation to growth, but it is impossible to piece together their dataset from the outside. Mr Singham says he is intending to publish work in journals, so has declined to share his data. www.bbc.co.uk/news/uk-45625724