Where Statistics Could Be More Accurate

In 2010, when Andreas Georgiou, an IMF (International Monetary Fund) economist, ran the Greek statistics office, he found little that was accurate. Rather than appreciating his corrections, though, Greek authorities charged him with “complicity against the state, violation of duty, and slander.”

Last week, to be sure he avoided a similar pickle, the head of Argentina’s statistics office resigned.

Doctoring Statistics

Argentina

Marco Lavagna left Argentina’s national statistics agency when his plans to update the country’s inflation index were delayed. The overhaul was supposed to elevate their understated inflation data. However, the timeline changed when the Economy Minister said to wait until inflation was under control. With the statistical revamp already having been delayed by two years, Argentina was falling deeper into a fantasy world that distorted a slew of policy decisions that depended on knowing the real inflation rate.

Elected to rein in runaway prices, President Javier Milei implemented some painful shock therapy. Not there yet although inflation is far from the 2023 200% rate, still he appears concerned with accurate data.

Greece

In 2001, as a new member of the eurozone, Greece’s deficit could be no more than 3 percent of its GDP. However, in 2010, when Andreas Georgiou, a former IMF (International Monetary Fund) official, ran the Greek statistics office, he found little that was accurate. Instead of 3 percent the numbers were much higher.

Learning the real statistics, the EU demanded gargantuan spending cuts that meant slashing the government payroll and cutting pensions. In addition, the Greek government tried to imprison Dr. Georgiou (who has remained in the U.S. teaching economics).

According to a recent ekathimerini article, the Greek Supreme Court could be close to annulling Dr. Georgiou’s past convictions and ending his decade-long courtroom nightmare.

Our Bottom Line: Accurate Statistics

Greece eventually needed a bailout. With a ballooning deficit, they could neither pay back what they were borrowing nor sustain the interest payments. And yet they needed to avoid a default that would injure the financial health of the banks and governments and individuals that owned their debt. Basing its assistance on the condition that all fiscal data was accurate, the EU saved Greece.

So yes, Greece finally knew its unemployment rate, its GDP growth rate, its pension obligations, its debt.

While its subsequent fiscal austerity was painful, only through accurate statistics could they (and all of us) identify and solve economic problems.

My sources and more: Seeing this WSJ article, I immediately remembered the (still unresolved) Greek situation. Then, this Greek news service had the update for the Georgiou case.

Please note that several of today’s sentences were from a past econlife post.